INDIANAPOLIS (WISH) – The state’s top treasurer said on Friday that the new investment law will not limit Indiana’s investment options.
The Republican-majority legislature in Indiana passed a law this spring banning the state’s retirement plans from partnering with investment managers that engage in so-called ESG investing. That includes making investments based on various environmental and social factors. It has become a target for Republican lawmakers across the country.
The final version of the bill, signed into law by Gov. Eric Holcomb, directs the state treasurer to consider public statements by investment fund administrators working with state employee retirement plans. If any party demonstrates his commitment to ESG investing, the state must stop doing business with that investor if it can find another investor offering the same services.
State Treasury Secretary Daniel Elliott told News8 that the new law will only cover the decisions of investment fund managers and not individual companies. As an example, he said Apple’s environmental goals wouldn’t cause the state to sell the business from a particular company.
“We intend to review any policy publicly expressed by any of these investment fund managers, review any public statement, and review any specific publicly-made statement or public initiative.” part of it,” he said. “In my opinion, everything should be very transparent.”
The new law specifically seeks investment managers to intentionally exit business from companies in industries such as fossil fuels, mining, firearms and ammunition, and companies contracting with Immigration and Customs Enforcement for immigration detention services. I’m telling Elliot to do it. Elliott said the language does not tie retirement plans to these industries. He said that if the introduction of renewable energy makes fossil fuels less profitable, those companies will not be able to guarantee maximum profits, so the state will invest elsewhere.
An earlier version of the ESG ban was estimated to cost state retirement plans $6.7 billion over 10 years, a sum that has drawn opposition from business groups. The final version signed into law is a major rewrite from the House’s original proposal, but no cost estimate exists. Elliott said the sheer number of investment fund managers means it is unlikely that states will stop trading with some ESG commitments, leaving them with no choice but to invest.
Asked whether the new law would qualify as a legislator who interferes with the free market, Mr. Elliott said: “What happened is that there are a lot of companies and certain people with certain political ideologies, and they have weighed. It’s taking our thumbs off the scales and saying that we must focus solely on what is in the best economic interest of pensioners.”
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