Kentucky bans ESG investing for public pensions

Just the News ^ | March 28, 2023 | Ben Whedon

[Twotone]

Kentucky Democratic Gov. Andy Beshear has signed into law a measure barring asset managers handling the state's retirement systems from considering environmental, social, and governance (ESG) factors when making investments with state funds.

Beshear signed House Bill 236 on Friday, requiring that such asset managers only consider financial factors and the interests of the fund's beneficiaries. It further explicitly bans "actions on nonpecuniary interests including environmental, social, political, and ideological interests," a summary of the bill explains.

State Treasurer Allison Ball celebrated the law's signing, saying "Kentucky now has the strongest anti-ESG legislation in the nation."

"For many years, pension investments were about maximizing returns," she continued. "Recently, however, there has been a destructive shift in investment methodology to use the savings of Americans as financial muscle to push ideological causes through the ESG movement. Kentucky has said no to this shift by passing HB 236, which clarifies that pension fiduciaries must base investment decisions solely on financial metrics, not politics."

ESG investing is a practice in which asset managers make investments with a mind toward non-financial considerations, such as a firm's sustainability practices. The concept has attracted scrutiny from Republicans due to concerns that this approach may constitute a breach of fiduciary duty to investors.

That scrutiny has grown stricter in recent weeks following the collapse of Silicon Valley Bank, an avid practitioner of ESG investing.

[BobL]

“Kentucky Democratic Gov. Andy Beshear has signed into law”

If he signed it, then he got what he wanted, which was a bill full of loopholes. BANK ON IT.

[econjack]

I have faith that those fund managers who only want to invest in woke businesses are doing little more than shooting themselves in the foot. I do my little part by not buying woke products. No more Coke, Aunt Jamima, Uncle Ben, Land-O-Lakes...If enough people do this, sales will erode, profits get crushed, the these twits who call themselves fund managers end up managing little more than the change in their pockets.

[Nervous Tick]

>> If he signed it, then he got what he wanted, which was a bill full of loopholes. BANK ON IT.

Maybe. Or maybe, he realizes his veto would quickly be overridden.

[BobL]

“Maybe. Or maybe, he realizes his veto would quickly be overridden.”

Could be. I can’t speak for Kentucky, but I’ve seen enough behavior from super-majority GOP states, including my Texas, to NEVER assume a bill will get overridden, given the bunch that runs the GOP at all levels.