by Ben Whedon
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.
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.
Florida Republican Gov. Ron DeSantis moved to bar state fund managements from considering ESG concerns in January of this year. Earlier this month, the governor announced the formation of a coalition of 19 states to combat ESG practices. Kentucky was not among them.
Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.
Source: https://justthenews.com/politics-policy/kentucky-bans-esg-investing-public-pensions
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