Louisiana Treasury to Divest Over Adviser's ESG Policies
The Louisiana State Treasury notified one of its advisers that it will liquidate investments with the adviser by the end of 2022 over concerns that the adviser's support of ESG policies would be detrimental to the state's economy. The State said that it has already divested $560 million to date, and plans to divest the remaining $234 million before year's end, for a total of $794 million.
In a letter to the adviser, the State said that it will "strategically divest" its investments because the adviser's support of ESG policies is anti-fossil fuel and Louisiana's economy relies heavily on the fossil fuel industry. The State said that the adviser's support of ESG policy contradicts its own interests given its investment in oil and gas companies, and the adviser previously admitted that an "ESG agenda of forcing behaviors will not increase investor returns." The State said that it will continue to prioritize safeguarding investor returns over pushing "political and social agendas embodied in ESG investing." It emphasized that ESG-focused investment firms must be held to the same fiduciary standards as all other firms, and not be given any special treatment to promulgate a political agenda.
Separately, a collective of 19 state attorneys general submitted a letter to the adviser expressing similar concerns, and asserting that the ESG policies may violate state laws prohibiting boycotts of energy companies.
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