Investment management firms are required to make investment decisions that maximize financial returns to the greatest extent possible. But across the country, an unfortunate trend has emerged among prominent investment firms that prioritize political agendas and ideology above their clients’ returns. “Environmental, social, and governance,” or “ESG” practices are not only legally suspect—they are financially reckless.
We must ensure that ESG has no place in our state’s finances. Public officials are responsible for investing billions of dollars in retirement funds, pension funds, and other investment vehicles. Those hard-earned dollars must not be sacrificed to advance progressive social causes like green energy or gun control at all costs.
State law is already clear that public money can’t be invested in companies that support international terrorism, human rights atrocities, and threats against valuable trade partners such as Israel.
With the increased prevalence of ESG practices among investment firms, more must be done to protect Iowa’s investments.
Governor Reynolds proposes:
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Investment firms that manage the state’s money must not boycott fossil fuel energy or firearms companies, or generally invest funds to further environmental, social, governance, political, or ideological interests over maximized returns.
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The state must scrutinize companies in which it invests public funds and divest from those that engage in ESG practices.