Bradley attorney Stephen Parsley discussed pushback from states on insurers incorporating environmental, social and governance (ESG) criteria into their investment decisions for state pension funds and other related state assets.
This pushback is particularly prevalent in the South and Western states, and Parsley noted, “Over the past year, Arkansas, Florida, Idaho, Kansas, Kentucky, Montana and Utah have passed laws circumscribing the use of ESG factors.”
Parsley also took note of Florida’s recent law, which represents one of the more far-reaching efforts to restrict sustainable investing, saying it “bars the consideration of the furtherance of any social, political, or ideological interests,” and prohibits ESG bond sales.
Parsley said it’s possible that parallel sets of laws might be developed, one for states supporting environmental, social and governance standard, and another for jurisdictions opposing them. He predicts future clashes between the federal government and states, including over litigation spearheaded in Republican-led states against Department of Labor rules, that let ERISA fiduciaries for retirement plans consider ESG considerations in investment decisions.
The full article, “Attacks on ESG Show Insurers Caught in Crossfire in Culture Wars,” was published in Life Annuity Specialist on May 17, 2023. (login required)