Investing in ESG funds carries enhanced risks to Indiana pension funds. They are not a good idea for our public employee retirement funds.
Economic experts agree that due to the long-term view that pension funds must take, these funds face enhanced exposure to the negative effects of ESG ratings. A recent article in Reason states that “ESG investing may well constitute a fiduciary failure for pension funds.” Read the entire article here.
Don’t just take my word for it. Take the time to read Tariq Fancy’s essay. Tariq was the Chief Investment Officer for Sustainable Investing with BlackRock and has an insider’s view on the financial dangers of ESG funds. BlackRock is one of the biggest ESG Investment funds out there. Tariq has called ESG funds a “dangerous placebo that harms the public interest.” Read his essay here.
You can also read about the downside risks of ESGs to pension funds in a report written by the Wharton Pension Research Council. The paper can be read here.
As your next state treasurer, I take the job of protecting our state pension funds very seriously. I will focus on managing pension plans based on the best interest of pension beneficiaries. Picking funds based on ESG ratings is not in the best fiduciary interest of our pensioners.