State pensions, including Texas, have been influenced by the wave of political activism within the finance industry and need to develop tools to ensure they stop supporting such activism.
Key points
– Consolidation in the finance industry has enabled progressive political activists to coopt the industry to advance their agenda on issues ranging from climate change to abortion. This activism undermines the financial performance of American businesses, our democratic institutions, and our market economy.
– State pensions, while not active promoters of environmental, social, and governance (ESG) investing, are still being brought into ESG trends through the actions of advisors and consultants that they use. On average, state pension funds are voting in favor of more activist shareholder proposals than any of the Big Three (Black Rock, Vanguard, State Street) who are active promoters of ESG.
– The feedback loop between public opinion, government policy, and corporate actions must be broken to prevent the continued takeover of the means of production by government and crony corporatists.
– State agencies and pensions should not become counter-activists to the ESG movement but must ensure laser focus on fiduciary duty. State legislatures must clearly define in statute that ESG investment strategies and ESG shareholder resolutions run counter to the fiduciary duty of state pensions and should be avoided in all forms.
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