Panelists raise concerns about ESG in pension funds

The continued and increasing sway of environmental, social, and governance factors in the public finance realm has some observers concerned that pension money managers are allowing politics too much influence on their funds.   

Ramifications of the increasing popularity of ESG investing on public pension funds was discussed during a Tuesday webinar hosted by the Reason Foundation, a libertarian think tank based in Los Angeles.

“People should be able to invest in what they want,” said former Securities and Exchange Commission Commissioner Paul Atkins said. “If someone is investing in a broad index fund, and the manager puts down their own views, that becomes worrisome. If they don’t realize the money manager has this bias to direct these investments or is using it behind the scenes to strong-arm companies to their chosen political, social, or religious type of preferences, that’s the real problem here.” 
ESG was characterized as a “blank canvas that folks can paint hopes and dreams upon,” by moderator Leonard Gilroy, vice president of government reform at Reason Foundation. The sector, according to estimates, will be worth $50 trillion by 2025. 

“People should be able to invest in what they want,” said former Securities and Exchange Commission Commissioner Paul Atkins said.

Bloomberg News

Panelists named large investment firms with interests in public pension funds, including State Street, Vanguard and BlackRock, as companies that may be tilting huge amounts of investments to the left, a trend that appears to be picking up steam. 

“ESG investing grew very rapidly and very insidiously,” says Andrew Puzder, former chief executive at CKE Restaurants, the parent company of Hardee’s and Carl’s Jr.

“It’s come to permeate our lives. Stakeholder capitalism, woke capitalism, it’s the management of large financial firms realizing what tremendous power they have,” he said. “These large, powerful pension funds are actually setting public policy. We have an institution that sets public policy it’s…

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