Kentucky Attorney General Daniel Cameron previously warned that the state pension funds cannot legally make environmental, social and governance (ESG) considerations when investing the dollars of public employees.
This week, Cameron and state Treasurer Allison Ball, both elected Republicans, asked two state pension systems to provide proof that pension funds are primarily focused on return on investment in decisions on where state employee money goes.
“Recently, Treasurer Ball asked the Office of the Attorney General whether environmental, social, and governance (ESG) investment practices, which introduce mixed motivations to investment decisions, are consistent with Kentucky law governing fiduciary duties owed by investment managers to Kentucky’s public pensions,” the Oct. 31 letter from Cameroon and Ball says. “The Attorney General opined that such practices violate statutory and contractual fiduciary duties.”
The letter was sent to David L. Eager, executive director of the Kentucky Public Pension Authority that manages $38.07 billion in retirement funds, and Gary L. Harbin, executive secretary of the Kentucky Teachers’ Retirement System, which manages $28 billion.
“We write today to request that you, as the executive directors of the Commonwealth’s major public pension systems, advise our Offices about your systems’ efforts to ensure that ESG considerations are not being implemented in your systems’ investment decisions, consistent with Kentucky law,” the letter continues.
The letter gave the pension directors a deadline of Nov. 23 to respond. However, that has been extended to early December after the respective boards of trustees for the pensions meet, Eager told The Daily Signal.
“That is a decision the board will make, not the executive director,” Eager told The Daily Signal in a phone interview.
Eager said the teachers pension board will meet on Dec. 1 and the public pension board will meet on Dec. 5.
In a more definitive way, a top official with the state’s Teacher Retirement System told The Daily Signal that it is not engaged in ESG investing.
“TRS is happy to respond to the recent letter from the AG and Treasurer as requested,” Beau Barnes, deputy executive secretary and general counsel to the teachers pension system, said in an email. “TRS is not an ESG investor. TRS investment policy makes enhancing and protecting asset value the goal of all investing, which is consistent with TRS’s fiduciary duty under law. This fiduciary responsibility is to achieve the best returns within acceptable levels of risk for its members.”
In a public statement this week, Cameron said: “Rising inflation has made protecting the retirement security of Kentucky’s public employees even more essential. Prioritizing ESG-related investments above the financial interests of investors is inconsistent with Kentucky law, and we’ve sent this letter to ensure these practices are not at work in the Commonwealth.”
Consumers’ Research, a national organization advocating against ESG investing in both the public and private sector, praised Ball and Cameron for taking this stand.
“The joint action of Treasurer Ball and Attorney General Cameron sends a clear message to Kentucky’s pension fund investment managers: their obligations are to work for the pensioners, not the Democratic Party, international climate groups, or megalomaniacs like Larry Fink,” Will Hild, executive director of Consumers’ Research, said in a public statement. “We applaud both officials in standing up for the citizens of Kentucky, who are being crushed due to reckless, illegal actions by companies like BlackRock, Vanguard, and State Street that put progressive politics above their legal and moral duties.”
The Kentucky attorney general’s office issued an opinion in May that pension managers must make investment decisions based on the interest of members and beneficiaries, under state law.
“In sum, politics has no place in Kentucky’s public pensions. Therefore, it is the opinion of this Office that ‘stakeholder capitalism’ and ‘environmental, social, and governance’ investment practices that introduce mixed motivations to investment decisions are inconsistent with Kentucky law governing fiduciary duties owed by investment management firms to Kentucky’s public pension plans,” the opinion says.
The opinion says investment managers “must be single-minded in their motivation and actions and their decisions must be solely in the interest of the members and beneficiaries [and for] the exclusive purpose of providing benefits to members and beneficiaries.’”
Ball initially requested the attorney general’s opinion on the matter.
“Kentuckians worked hard for decades to earn their pensions and rely on them for livelihood in retirement. It is important their investments are maximized, not politicized,” Ball said in a public statement. “As the watchdog of taxpayer dollars, I remain committed to ensuring funds are invested and spent consistent with the law.”
The post Kentucky AG Daniel Cameron: Prioritizing ESG Investments ‘Inconsistent’ With Law appeared first on The Daily Signal.
- JOSH HAMMER: Mob Rule Is Taking Over The West - April 2, 2023
- JUDGE ANDREW P. NAPOLITANO: Trump Can Be His Own Worst Enemy - April 2, 2023
- SHOSHANA BRYEN: Here’s What Really Lies Behind The Biden Admin’s Icy Israel Relationship - April 1, 2023
New Right Network depends on your support as a patriot-ran American news network. Donate now