Beech Tree News Network

"Testifying at a recent state Public Pension Oversight Board (PPOB) meeting, Mills, a Republican from Henderson, indicated he’s drafting a bill requiring the primary objective of those making investment decisions directing public pension funds be maximum financial return, not furthering a woke ESG agenda."

-----

“So if you stay ready, you ain’t gotta get ready, and that is how I run my life,” actor-turned-philosopher Will Smith once said.

While that’s good counsel for life in general, it’s also worthwhile advice for lawmakers wanting to protect Kentuckians and our public pension systems from progressive activists seeking to inject their personal radical environmental, social and governance (ESG) ideology into investment decisions involving the commonwealth’s public pension funds.

Unable to secure majority support through democratic means for their ultimate goal – destroying America’s prosperity by preventing the accessing and production of fossil fuels, thus returning America to a horse-and-buggy transportation environment – activists and their corporate allies seek to weaponize investment policies, forcing companies to adhere to their extremist views … or else.

Sen. Robby Mills wants Kentucky to get – and stay – ready to reject a likely attempt to force the state’s pension systems to make investment decisions based on an ESG agenda rather than one simple – and the only acceptable – goal: obtaining the best financial return on pensioners’ funds.

Testifying at a recent state Public Pension Oversight Board (PPOB) meeting, Mills, a Republican from Henderson, indicated he’s drafting a bill requiring the primary objective of those making investment decisions directing public pension funds be maximum financial return, not furthering a woke ESG agenda.

The progressives, of course, aren’t on board.

“I’m an extremely wealthy woman,” Louisville Democratic Sen. Karen Berg retorted in an enlightening back-and-forth with Mills. “I have a lot of fiduciaries working for me, and with my money my goal is not just to maximize profit but to make sure that my money is not supporting bad causes and not being used to support things that I think are wrong, OK?!”

Berg claims Mills’ approach would take away her right to require fiduciaries managing her investments follow her wishes.

But Mills didn’t disagree with Berg’s right as an individual to “guide” her money to entities she personally supports or away from those she deems harmful – even if they don’t produce maximum returns. However, he correctly added, fiduciary-activists don’t have a right to force ESG practices advancing their own ideology on the policies governing others’ investments.

Chaos would ensue if they tried.

Imagine the 410,000members in the state workers’ retirement systems attempting to force each of their individual personal, political and social views on the investment decisions of the entire group.

Mills said his bill will also provide oversight of proxy votes – ballots cast by legally authorized individuals or firms for companies’ shareholders who can’t attend or don’t want to vote on the issues – by requiring proxies to acknowledge their fiduciary responsibility in writing.

This requirement will prepare Kentucky to prevent the troublesome practice of proxies casting a vote based on ESG ideology only to then be allowed to hide behind the party they represent as having less-than-full fiduciary responsibility when returns are dismal.  

The implications of forcing that ideology on pension systems or other entities, like large banks do by denying services and capital to companies lending or investing in fossil fuels industries, are particularly troublesome for Kentucky.

As the nation’s seventh-largest producer of coal, where black rock generates more than two-thirds of our state’s electricity, allowing ESG ideology to gain a foothold would devastate one of our state’s most attractive economic indicators: lots of energy at low costs.

Finally, Kentucky needs to “get” and “stay ready” by ensuring that the way it runs its pension-investment practices supersedes edicts from Washington, where the Biden administration continues to pursue changing federal fiduciary rules from investing policies based on maximizing returns to allowing for destructive ESG activism.  

---

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. Reach him at [email protected] and @bipps on Twitter.