IDEAS home Printed from https://ideas.repec.org/p/mns/wpaper/wp202401.html
   My bibliography  Save this paper

Can Anti-ESG Policy Protect Targeted Industries from Divestment?

Author

Listed:
  • Jonah J. Allen

    (Department of Economics and Business, Colorado School of Mines)

Abstract

This study examines the efficacy and implications of state-level anti-Environmental, Social, and Governance (ESG) policies by investigating the impact of Texas's anti-ESG policy on oil and gas (O&G) drilling activity through a difference-in-regression-discontinuity design comparing the Texas and New Mexico Permian. I find that the policy had no statistically significant effect on new drilling activity in the eight months after implementation; this is consistent across several robustness checks. Results are also not economically significant, other than in a few robustness checks. This suggests that banks did not respond to the policy by adapting short-term lending behavior, which is one pathway through which to signal to the regulator that the institution is not boycotting energy companies. Short-term lending has been subject to industry-wide changes in recent years and is particularly relevant to regulators seeking to protect O&G investment within state borders. This paper contributes to the nascent literature on anti-ESG policies in the United States.

Suggested Citation

  • Jonah J. Allen, 2024. "Can Anti-ESG Policy Protect Targeted Industries from Divestment?," Working Papers 2024-01, Colorado School of Mines, Division of Economics and Business.
    • Handle: RePEc:mns:wpaper:wp202401
    as

    Download full text from publisher

    File URL: http://econbus-papers.mines.edu/working-papers/wp202401.pdf
    File Function: First version, 2024
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ESG policies; anti-ESG; Oil and Gas; Permian Basin; Reserve-based lending;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mns:wpaper:wp202401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jared Carbone (email available below). General contact details of provider: https://edirc.repec.org/data/decsmus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.