April 14, 2023

Anti-ESG bill passes state House, would name financial managers Indiana should avoid

Article origination IPB News
If the bill becomes law, State Treasurer Daniel Elliott would inform the Indiana Public Retirement System of financial managers with ESG commitments that the state should not contract with.  - Brandon Smith/IPB News

If the bill becomes law, State Treasurer Daniel Elliott would inform the Indiana Public Retirement System of financial managers with ESG commitments that the state should not contract with.

Brandon Smith/IPB News

A bill that aims to cut ties with financial institutions with certain ESGs passed the state Senate on Thursday. ESGs are policies that consider the environmental or social impacts of their investments.

Those in favor of House Bill 1008 believe these institutions are discriminating against Indiana businesses like coal companies and firearm makers — putting politics before their financial obligations.

READ MORE: Lawmakers try again to cut ties with banks that divest from coal, study says it could be costly.

The amended bill would require the state treasurer to make a list of financial investment managers with ESGs and provide evidence as to why the state shouldn’t invest its pension funds with them. The Indiana Public Retirement System couldn’t have a contract with those managers.

But there would be some exceptions. The state could keep doing business with them if there wasn’t a comparable provider — or if ending that contract wouldn’t provide financial benefits for pensioners.

 

 

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Those opposed to the bill — like the Indiana Chamber of Commerce — say it’s anti-free market and picks winners and losers by excluding some institutions with ESGs.

Sen. Rodney Pol (D-Chesterton) voted against the bill, which passed along party lines.

“We heard that Hoosier values would dictate those investments. And again that, to me, just seemed like it was counterintuitive — the idea that if we’re just focusing on a fiduciary duty, the values aspect of that wouldn’t seem to play," he said.

Pol said if the bill becomes law, more industries could lobby to get protection from these kinds of ESG divestments. The bill now goes back to the House to consider changes made to it.

READ MORE: Indiana pays anti-ESG firm to advise on state pension funds.

Rebecca is our energy and environment reporter. Contact her at rthiele@iu.edu or follow her on Twitter at @beckythiele.

Copyright 2023 IPB News. To see more, visit IPB News.

 

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