Indiana Attorney General Todd Rokita has warned there will be penalties for investment firms who consider climate change or other “woke” criteria when managing the state pension fund.
The notice from Mr. Rokita is part of a political war that GOP-led states are waging against Wall Street banks and finance firms that integrate environmental, social and governance or ESG policies into their monetary decisions, which conservatives say jeopardize customers’ returns to advance a left-wing agenda.
Mr. Rokita, a Republican, believes firms like Blackrock, one of the globe’s largest investment firms, are potentially subverting state law that bars institutions handling the Indiana Public Retirement System (INPRS) from making investments on anything other than the greatest return.
“ESG goals, however you feel about them, are not more important than a financial investment,” Mr. Rokita told The Washington Times. “It’s illegal in Indiana to put anything other than financial returns as your highest fiduciary duty, at least in terms of the public employee retirement system.”
Mr. Rokita and elected Republicans in other states are investigating the ESG policies of financial institutions that do business with their state governments. He said Blackrock should be “very careful about what they’re doing because they may be breaching Indiana law.”
He added that he has not found wrongdoing by any company.
Blackrock, which has become the poster child of the anti-ESG movement, declined to comment.
It was one of several financial firms booted by West Virginia from doing state business, and Texas has threatened to do the same. The company also was the target of a multimillion-dollar campaign launched by a conservative group that combats “woke capitalism,” accusing Blackrock CEO Larry Fink of having “weaponized” retirement funds by using its “clout to push a radical agenda.”
Blackrock has said that accusations it boycotts fossil fuels are false, anti-competitive and just plain “bad for business.”
ESG proponents argue that considering factors beyond profits is a moral duty for corporations. In some cases, such as with climate change, there are more financial risks to investing in fossil fuels, they say.
Supporters also point to negative consequences for taxpayers in states with anti-ESG policies. Texas will pay up to an extra $532 million in interest on $32 billion worth of loans within just eight months because of its anti-ESG law that caused large municipal bond underwriters to flee the state, according to a study by the University of Pennsylvania’s Wharton business school and the Federal Reserve Board of Governors.
“It’s a scare tactic,” Mr. Rokita said.
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
Please read our comment policy before commenting.