An American flag waves in the window at the edge of a farm outside of Walsh, Colorado, on Dec. 6, 2021. (John Fredricks/The Epoch Times)
‘The attack has already begun,’ says Nebraska State Treasurer
The latest threat to farming can be identified in three familiar letters.
State treasurers at the State Financial Officers Foundation (SFOF) told The Epoch Times on Nov. 14 that the United States’ agricultural base could be jeopardized by the top-down push for environmental, social, and corporate governance (ESG) scoring.
“It’s a real threat,” Nebraska State Treasurer John Murante said.
Farming is critical to the Cornhusker State’s economy, as that nickname suggests. The University of Arkansas reports that Nebraska produced over $21 billion in agricultural cash receipts during 2020.
During a panel discussion with Louisiana State Treasurer John Schroder and SFOF CEO Derek Kreifels, Murante warned that ESG criteria in the financial sector pose a real risk to agriculture as we know it.
Many asset managers and leading banks have committed to “Net zero by 2050,” often through participation in United Nations-linked entities such as the “Glasgow Financial Alliance for Net Zero” and “Climate Action 100.”
If those powerful institutions decide farming and ranching are excessively harmful to the climate, the flow of capital to agriculture could slow to a trickle—well before consumers feel the impact at their dinner tables to know the impact of the ESG efforts.
“When it comes to farmers and ranchers, how to get to net zero when using fertilizer, which is produced by natural gas, is extremely difficult—if not impossible—which is why we sometimes joke that the policy of certain asset managers seems to be that farmers can continue growing food, they just can’t use water or fertilizer to grow them,” Murante told The Epoch Times.
“The attack,” he said, “has already begun.”
Murante pointed out that BlackRock CEO Larry Fink recently joined former president Bill Clinton at a Clinton Global Initiative meeting in September.
Murante warned, “They’re not talking in theory, they’re not using rhetoric, they’re making commitments to make it happen, and we don’t think it is at all appropriate for public finances to be used for that purpose.”
Murante believes the dramatic increases in fertilizer prices since 2021 can be traced in part to ESG or ESG-like policies that are among the factors increasing the price of energy.
And activist investors who want companies to divest from fossil fuels as fast as possible aren’t exactly eager to fund new fossil fuel exploration and production.
Between July 2021 and July 2022, the cost of anhydrous ammonia surged from $726 a ton to $1,469 a ton, per the University of Illinois. That’s over 200 percent of the original price. Other fertilizer prices similarly increased during the same period, according to the same source.
“Anytime you drive up energy costs, you make farming and ranching extraordinarily difficult,” he said.
“Farmers are not Wall Street bankers. They can’t afford to just absorb a 200 percent increase in their cost of goods and their cost of doing business,” he continued.
Louisiana State Treasurer John Schroder shares these concerns over ESG and farming, as well as other core industries for many states, including his.
“Louisiana is heavy in oil and gas and heavy in agriculture,” he told The Epoch Times.
Missouri State Treasurer Scott Fitzpatrick told The Epoch Times he was not aware of many examples of ESG policies directly impacting farmers and ranchers. But he agreed that ESG is indirectly harming food production through its effect on energy prices and inflation.
“I think that we can certainly attribute the rise in the cost of energy to ESG activism,” he said.
He believes the ESG risk to farmers and ranchers will increase significantly if ESG-style regulations on banking and the private sector continue to expand.
Fitzpatrick is especially worried about the Federal Deposit Insurance Corporation’s (FDIC) proposed principles on what the U.S. government agency has classified as climate-related financial risks.
Virtually all banks in the United States carry FDIC coverage.
Coupled with proposed climate risk rules from the Securities and Exchange Commission (SEC), a hard line on climate from the FDIC could ultimately make things even harder for food producers, Fitzpatrick believes.
“That’s when you’re really going to have a significant impact on [agriculture], I think.”
