South Carolina House signs off on ESG ban

The South Carolina House signed off on legislation requiring the state’s retirement system to consider only "pecuniary factors" when making investment decisions, essentially barring it from weighing environmental, social and governance factors.

Lawmakers on Thursday gave the third approval to H. 3690, the "ESG Pension Protection Act," sending the legislation to the state Senate, which referred it to the Committee on Finance. The measure could require the Retirement System Investment Commission to spend an additional $1 million to hire five additional employees, depending on how the legislation is implemented if signed into law.

According to a fiscal estimate from the South Carolina Revenue and Fiscal Affairs Office, RSIC outlined three scenarios to achieve the bill’s requirements: managing proxy voting in-house, hiring an external proxy advisor and delegating the proxy voting to an external investment manager. However, RSIC officials are unclear on "which of these three scenarios will fully accomplish the requirements of this bill," according to the analysis.

The fiscal estimate indicated the agency would need more than $1 million and five full-time employees to manage the proxy voting in-house or up to $292,000 to hire an external proxy advisor. Delegating the proxy voting to an external investment manager would not require additional money.

"This crucial bill will protect South Carolinians’ retirement savings by ensuring fiduciary responsibility and prohibiting unsound, politically motivated investments," Americans for Prosperity-South Carolina State Director Candace Carroll said in a statement. "From Congress to state capitals across the country, lawmakers are rejecting radical ESG ideals that threaten to hold retirement accounts hostage."

I am curious as to what position South Carolina’s corporate overlords have on ESG in investment. Given SC’s automotive manufacturering/assembly economy is investing heavily in EVs, would BMW, Mercedes, and Volvo be against ESG investment restrictions?

2 posted on 04/09/2023 9:25:53 AM PDT by buckalfa (Gut feelings are your guardian angels)

You could argue that ESG-motivated investment is based on probable returns. In what other fields does government shovel taxpayer money to favored enterprises and penalize the disfavored? Add in government green energy mandates and targeted tax breaks and there are many pecuniary factors favoring what the governing elites favor.

If I understand it correctly, the law isn't forbidding the pension managers from investing in ESG companies. The law is saying to base investment decisions on profit expectations alone. So the pension can invest in ESG companies, but only if it's good for growth.

And by the way, ESG is nothing but a Democrat Party butt-kissing score. As soon as Musk said he was going to quit voting Dim, Tesla's ESG rating tanked.

4 posted on 04/09/2023 12:52:34 PM PDT by Tell It Right (1st Thessalonians 5:21 -- Put everything to the test, hold fast to that which is true.)

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5 posted on 04/09/2023 2:07:42 PM PDT by upchuck (When you never took the vaccine or boosters: Still alive and healthy with no chance of side effects.)

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