Heritage Action and Indiana State Attorney General Todd Rokita have joined the ranks of those urging passage of HB 1008, a state bill to require that investments in the state’s public pension system be chosen based solely on their financial merit – and, not on how they might achieve, or oppose, an environmental, social or governance (ESG) agenda.
“Environmental, social, and governance policies are the Left’s latest political tool to use businesses and financial institutions to force their progressive ideology on the American people, including in states like Indiana,” Executive Director Jessica Anderson says in a press release calling for the bill’s passage:
“ESG policies threaten Indiana retirees and put key state industries at risk, including the energy, manufacturing, and agricultural industries that keep Indiana’s economy thriving. Heritage Action thanks Rep. Ethan Manning for leading the charge against ESG and sponsoring HB 1008. We encourage the bill’s passage in the Indiana House so that Hoosiers can trust their investments and economic interests are protected.”
Likewise, Indiana Attorney General Todd Rokita has released a statement supporting HB 1008 and calling for it to be made even tougher on ESG:
“We are encouraged by the General Assembly’s willingness to help with the fight against woke investment managers that fail to fulfill their fiduciary duty. House Bill 1008 punches ahead to protect our state’s investments by codifying INPRS’s (Indiana Public Retirement System's) policy of always placing financial returns above the ever-changing whims of climate change activists and leftist corporate policies.
“This bill still needs real legal teeth to hold any bite against the massive asset managers who handle a majority of the world’s wealth. It requires a real law enforcement mechanism which takes advantage of the court system and reinforces the full applicability of our consumer and anti-trust laws to the bill’s language. We are actively battling to protect investors against ESG practices and policies, including three investigations into the three largest managers – BlackRock, Vanguard and State Street.”
Rokita is just one of 25 state attorneys general that have filed a lawsuit against a new Biden Administration rule allowing retirement account investments based on ESG goals, instead of profit potential.
In particular, HB 1008 would require that:
- Investments be chosen based solely on their financial merit,
- The state treasurer make publicly available the names of money managers and companies that make ESG investments in violation of the law, and
- Indiana divest from, and terminate relationships with, any money managers or companies that refuse to comply with the law and continue to choose investments based on ESG goals.
The Indiana General Assembly’s synopsis of HB 1008 follows (emphasis added):
“Synopsis: Pension investments. Provides that a fiduciary, in making and supervising investments of a reserve fund of the public pension system, shall discharge the fiduciary's duties solely in the financial interest of the participants and beneficiaries of the public pension system. Establishes certain requirements for fiduciaries, proxy advisors, service providers, and proxy voting. Requires a governmental entity to, at least annually, tabulate and report all proxy votes made in relation to the administration of a fund of the public pension system. Provides that the treasurer of state shall enforce these provisions. Provides that if the treasurer of state determines that a person has engaged in, is engaging in, or is going to engage in a violation regarding fiduciary duties, the treasurer of state shall make available to the public the name of the person or a specific fund offered by the person. Requires the treasurer of state to provide written notice to the person. Requires the person to demonstrate to the treasurer of state that the person or the specific fund is in compliance with the requirements not later than 90 days after receiving notice. Requires the treasurer of state to provide the name of the person or the specific fund to the board of trustees of the Indiana public retirement system (board) if the treasurer of state determines that the person or the specific fund is not in compliance with the requirements after the 90 day period. Provides that the board shall begin divesting from and terminating any business relationship with the person or the specific fund according to the board's best judgment on the timing of the divestment and termination of a business relationship in order to maximize returns, minimize losses, and minimize management fees. Requires the board to make the board's rationale available to the public if the board determines that it is not in the best economic interest to divest and terminate a business relationship. Requires the board to amend the board's investment policies to comply with the requirements on or before December 31, 2023.”
Editor's Note: This piece reprinted with permission and was first published on CNSNews.com.