State Financial Officers Foundation is an organization made up of state auditors, controllers, or treasurers that promotes free markets and fiscally responsible public policy while opposing the use of Environmental, Social, and Corporate governance (ESG) principles in investment decision for public pensions. As of late 2022, the organization has 28 state financial officer members. ¹

Congressional Democrats have targeted the organization and sought to push financial institutions to stop donating or doing business with the SFOF. ²

Background

State Financial Officers Foundation (SFOF) is a nonprofit organization of state treasurers, comptrollers and auditors that encourage fiscal responsibility and oppose investments based on ESG (environmental, social, and governance) activism. ³

SFOF previously focused heavily on cybersecurity, borrowing costs and managing debt loads before the Biden administration began to promote a climate agenda. It shifted to energy issues after Biden took office, the New York Times reported. ⁴

SFOF financial supporters include JP Morgan, Wells Fargo, Visa, Mastercard, Fidelity, Federated Hermes, and SAP, which have publicly promoted ESG principles. ⁵

SFOF has also partnered with conservative-leaning organizations such as the Heritage Foundation, the Heartland Institute, the American Legislative Exchange Commission and the American Petroleum Institute for conferences and policy advocacy. ⁶

SFOF says it wants to organize financial officers from states with the soundest financial conditions, in partnership with the private sector and academia. The foundation says it “does not claim nor seek to be the voice of all state financial officers,” and its private sector leadership is limited to just 50 participating individuals and organizations. ⁷

Programs

In November 2022, State Financial Officers Foundation announced the launch of an anti-Environmental, Social, and Corporate governance campaign and website called “Our Money, Our Values” to educate the American public on the dangers of ESG investing and about methods used by firms such as BlackRock, Vanguard, and StateStreet. ⁸

SFOF organizes, finances, and conducts the activities of its Smart Women Smart Money program, with a mission to provide financial education and empowerment to women through conferences and educational information. ⁹

Policy Advocacy

In April 2022, a letter from 27 members from State Financial Officers Foundation urged President Joe Biden to prioritize traditional energy sources to make the United States energy independent, so it would not have to rely on hostile nations such as Russia, Iran, and Venezuela. ¹⁰

SFOF members sent a letter to the Securities and Exchange Commission in June 2022 criticizing a proposed rule to mandate climate-related disclosures for public companies. The officials highlighted eight concerns with the proposed rule including “extreme” cost to issuers. ¹¹

SFOF helped to defeat President’s Biden’s nominations of Saule Omarova to be Comptroller of the Currency. More than 20 top state financial officers signed on to a letter calling her a “radical extremist.” After Omarova withdrew her nomination, the SFOF CEO Derek Kreifels sent an email, obtained by the New York Times, to state treasurers titled, “VICTORY!” that said, “It’s an honor to work along side you all.” ¹²

The SFOF also opposed Biden’s nomination of Sarah Bloom Raskin, wife of Rep. Jamie Raskin (D-MD), to be on the Federal Reserve Board of Governors. Kreifels described Raskin as an “anti-energy climate change alarmist.” SFOF emails to state treasurers provided draft tweets and messaging strategies. Raskin also eventually withdrew her nomination. ¹³

Four states passed the legislation based on SFOF’s model “Energy Discrimination Elimination Act,” regarding financial institutions boycotting fossil fuel companies. Three other states passed similar bills on ESG investing. ^{14 15}

Democrat Opposition

Rep. Sean Casten (D-IL) has accused State Financial Officers’ Foundation of “spreading disinformation” and has tried to push bank CEOs into blacklisting SFOF from donations or business. ¹⁶ Casten called the organization a “dark money group that has been weaponizing state treasurers and lawmakers against climate-related financial risk management.” ¹⁷

In October 2022, Rep. Casten and Sen. Brian Schatz (D-HI), led 14 of their Democratic colleagues in a letter to JP Morgan Chase and Wells Fargo telling them to stop donating to SFOF. ¹⁸

Leadership

Derek Kreifels is the co-founder and CEO of the State Financial Officers Foundation.
Previously, Kreifels was an assistant state treasurer of Kansas. ¹⁹

Seth Metcalf is the president of the board of directors for SFOF. He is the CFO for Bold Penguin and a former deputy treasurer and executive counsel for former Ohio Treasurer Josh Mandel (R) from 2011 through 2017. ²⁰

1. Meyers, Ellen. “Republicans ride ESG backlash to state financial offices.” Roll Call. November 17, 2022. Accessed November 23, 2022. https://rollcall.com/2022/11/17/republicans-ride-esg-backlash-to-state-financial-offices/
2. Press Release. “Casten, Schatz, 14 Others Call on Megabank CEOs to End Funding to Organizations Peddling Climate Disinformation.” October 20, 2022. Accessed November 23, 2022. https://casten.house.gov/media/press-releases/casten-schatz-14-others-call-megabank-ceos-end-funding-organizations-peddling
3. “State Financial Officers Foundation holds a conference and makes an announcement.” Ballotpedia. Accessed November 23, 2022. https://ballotpedia.org/Economy_and_Society:_November_15,_2022
4. Gelles, David. “How Republicans Are ‘Weaponizing’ Public Office Against Climate Action.” New York Times. August 5, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html
5. Gelles, David. “How Republicans Are ‘Weaponizing’ Public Office Against Climate Action.” New York Times. August 5, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html
6. Gelles, David. “How Republicans Are ‘Weaponizing’ Public Office Against Climate Action.” New York Times. August 5, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html
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9. “State Financial Officers Foundation.” Cause IQ. Accessed November 23, 2022. https://www.causeiq.com/organizations/state-financial-officers-foundation,462604771/
10. “State Financial Officers Sends Letter to President Biden Warning About the Dangers of Energy Dependence.” Idaho State Treasurer Julie A. Ellsworth. April 5, 2022. Accessed November 23, 2022. https://sto.idaho.gov/About/Current-News/ArticleID/73/STATE-FINANCIAL-OFFICERS-FOUNDATION-SENDS-LETTER-TO-PRESIDENT-BIDEN-WARNING-ABOUT-THE-DANGERS-OF-ENERGY-DEPENDENCE
11. Querolo, Nic. “State Financial Officers Criticize ESG Disclosure Rule in Letter.” Bloomberg News. June 17, 2022. Accessed November 23, 2022. https://news.bloombergtax.com/financial-accounting/state-financial-officers-criticize-esg-disclosure-rule-in-letter
12. Gelles, David. “How Republicans Are ‘Weaponizing’ Public Office Against Climate Action.” New York Times. August 5, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html
13. Gelles, David. “How Republicans Are ‘Weaponizing’ Public Office Against Climate Action.” New York Times. August 5, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/08/05/climate/republican-treasurers-climate-change.html
14. Gelles, David. “West Virginia Punishes Banks That It Says Don’t Support Coal.” New York Times. July 28, 2022. Accessed November 23, 2022. https://www.nytimes.com/2022/07/28/business/west-virginia-fossil-fuel-banks.html
15. “Casten Statement on Responses from Wells Fargo, JPMorgan Regarding SFOF Sponsorship.” Rep. Sean Casten. November 15, 2022. Accessed November 23, 2022. https://casten.house.gov/media/press-releases/casten-statement-responses-wells-fargo-jpmorgan-regarding-sfof-sponsorship
16. Kreifels, Derek. “ESG Cancel Culture Comes for State Financial Offers.” Real Clear Politics. October 8, 2022. Accessed November 23, 2022. https://www.realclearpolitics.com/articles/2022/10/08/esg_cancel_culture_comes_for_state_financial_officers_148298.html
17. Meyers, Ellen. “Republicans ride ESG backlash to state financial offices.” Roll Call. November 17, 2022. Accessed November 23, 2022. https://rollcall.com/2022/11/17/republicans-ride-esg-backlash-to-state-financial-offices/
18. “Casten, Schatz, 14 Others Call on Megabank CEOs to End Funding to Organizations Peddling Climate Disinformation.” October 20, 2022. Accessed November 23, 2022. https://casten.house.gov/media/press-releases/casten-schatz-14-others-call-megabank-ceos-end-funding-organizations-peddling
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20. “Board of Directors.” State Financial Officers Foundation. Accessed November 23, 2022.  https://sfof.com/board-of-directors/