Texas fights back against ESG investing threats to pensions

During a recent government meeting in Texas, officials discussed the impact of Environmental, Social, and Governance (ESG) investments on public retirement funds. The meeting featured testimony from experts who expressed concerns about the financial implications of ESG strategies.

Eric Bledsoe, a senior fellow at the Foundation For Government Accountability, highlighted that Texas public retirement programs currently manage around $300 billion. He warned that ESG investments could jeopardize the financial security of retirees, including teachers and law enforcement officers. Bledsoe argued that ESG investing often yields lower returns compared to traditional investments. He cited a study showing that regular mutual funds consistently outperformed ESG funds, raising alarms about the viability of ESG as a sound investment strategy.

Bledsoe also emphasized that prioritizing political factors over financial returns violates the fiduciary duty owed to beneficiaries. He noted that Texas has taken steps to protect its public pensions from the pitfalls of ESG investing, advocating for legislation that would clarify fiduciary responsibilities and enhance accountability.

William Hild, executive director of Consumers Research, echoed these concerns. He criticized ESG investing for shifting corporate focus away from shareholder returns and consumer interests. Hild pointed out that recent studies claiming financial losses due to anti-ESG policies in Texas were flawed. He argued that these studies failed to account for broader market conditions affecting municipal bonds.

Both speakers urged Texas lawmakers to continue their efforts to safeguard public pension funds from political influences. They stressed the importance of keeping financial decisions focused on maximizing returns for retirees rather than serving activist agendas. The meeting underscored Texas's commitment to maintaining the integrity of its public retirement systems amidst growing national debates over ESG investing.