A new study finds that states boycotting certain companies over environmental, social, and governance (ESG) concerns could cost them as much as $708 million a year in extra borrowing costs.
The Philadelphia Inquirer reports that the study looked at municipal bond financing costs for Kentucky, Florida, Louisiana, Oklahoma, West Virginia, and Missouri.
It found that if five investment banks were banned from municipal bond markets, borrowing costs would rise between $264 million and $708 million in Kentucky, Florida, Louisiana, Oklahoma, West Virginia, and Missouri.
"Restrictions on financial market participants alter the outcomes of municipal bond market transactions and modify contractual engagements with state governments," Econsult Solutions states.
The study was commissioned by Ceres Accelerator for Sustainable Capital Markets.
A similar study by Wharton Business School found that Texas' ban on state entities working with banks and other financial institutions that have ESG policies raised the cost of borrowing by as much as $532 million in its first eight months.
A customized collection of grant news from foundations and the federal government from around the Web.
Ganesh Natarajan is the Founder and Chairman of 5FWorld, a new platform for funding and developing start-ups, social enterprises and the skills eco-system in India. In the past two decades, he has built two of India’s high-growth software services companies – Aptech and Zensar – almost from scratch to global success.