ESG opposition heats up

The ESG investment tug of war led by ideology, favours and politics will be ultimately weighed up in returns.

The Florida State Board of Administration passed a resolution Tuesday that all decisions related to the investment management of the Florida Retirement System will not include ESG considerations.

https://www.pionline.com/esg/florida-state-board-backs-desantis-resolution-ban-esg-considerations-managing-pension-plan

Make your own case for or against ESG investing, advocacy or activism, but this ‘decree’ just sounds extraordinary.

Or does it?

Does this decision tell us that ESG investing is deemed to lose its lustre?

It is within the trustees realm and objective to set investment strategy but one can’t help Governor Ron DeSantis’ ability to influence the other two trustees,

https://www.sbafla.com/fsb/Trustees,CouncilsCommittees/Trustees.aspx

The irony of this announcement lies in the ‘G’ of ESG.

The 3 trustees are all politicians from the current sitting government.

That can hardly count as prudent fiduciary governance.

If you take a look at the trustees and boards of government employee pension funds such as those in Australia……no politicians appear in the line up.

That can’t say they are devoid of influence, however none of them are the Governor, Premier, Treasurer nor Attorney General of the state.

Are the trustees telling us……

using ESG screens exclude the state’s pension money from other investing opportunities?

they think that exposure to ESG qualified corporations won’t produce an adequate return for the pensions target?

they oppose supporting the Wall Street ESG movement?

they are influenced by lobby groups supporting energy, mining and firearms industries?

After all, companies which aren’t scoring well in ESG rankings are/will have difficulty financing and shareholders.

This is part of my recent notes where I have mentioned the importance of watching “the financing mix, the shareholder mix and the energy mix’.

$240 billion of Florida’s state retirement money can help, not withstanding the other 15 states whom have signed anti-ESG bills.

https://www.reuters.com/legal/legalindustry/challenge-investing-face-state-anti-esg-legislation-2022-08-24/

Whether or not, DeSantis wins the Republican presidential nomination, look for Ashley Moody (Florida’s Attorney-General) to get a plumb job in the ’next’ republican federal government.

And there are always jobs waiting when your political career is over, but before that comes political donations.

August 26, 2022

by Rob Zdravevski

rob@karriasset.com.au

#ESG

#Florida

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