No “Wake Up” Criteria Allowed in Retirement Investments – Indianapolis Business Journal

Todd Rokita

Indiana and its investment managers cannot invest in the government employee retirement system based on environmental, social or governance criteria, Attorney General Todd Rokita wrote in an advisory opinion released Thursday.

Under state law, Rokita said, those decisions can only consider the financial interests of Indiana employees and retirees.

“Woke big business is working with their leftist allies to overthrow the will of the people,” Rokita said at a virtual event on Thursday. “This includes investing Hoosiers pensions in ways that work against the best interests of Indiana families.”

The so-called ESG framework seeks to use specific criteria – rather than general terms – to assess the environmental impacts of a particular company or investment, human rights policies and governance structures. But the framework has drawn ire from conservatives who say it promotes a ‘woke’ agenda.

“For example, ESG investors make conscious decisions not to invest in fossil fuel companies, regardless of the prospects for financial return, simply because investors are more determined to fight against what they think is global climate change, than to make a comeback to savers,” Rokita said. “Other ESG goals include implementing critical race theory in corporate training programs.”

In the advisory opinion, he concluded that Indiana law prevents Indiana’s public retirement system board from choosing investments based on ESG criteria, voting based on the criteria, and retain investment advisers who use the criteria.

State Sen. Eric Koch, R-Bedford, sought advice from Rokita, who serves as the legislature’s attorney.

But Rokita refrained from criticizing the 501,000-member system’s board itself. The pension system ended fiscal 2021 with about $45.8 billion in assets, according to its website.

Instead, he criticized companies hired to manage Indiana’s retirement investments.

“I want to be clear, the [system] the members of the board of directors … have worked hard to serve the best interests of Hoosiers,” Rokita said. “And we are grateful to them for that, but more and more actions by outside investment firms – the ones they are most often forced to deal with – threaten to ultimately erode that financial stability.”

“The increase in ESG investing has started to negatively impact public pension funds across the country. I don’t want that to happen here in the state of Indiana,” Rokita said later. His office did not immediately respond to a request for examples.

Rokita said his office was working with Arizona to review major investment management players like BlackRock, The Vanguard Group and State Street Corp., as well as with Missouri to review financial services firm Morningstar Inc.

Indiana joined Missouri on Thursday in another investigation into the Net-Zero Banking Alliance, launched in April 2021. The industry-led group of banks convened by the United Nations wants to reduce emissions from loan and debt portfolios. member investment to net zero by 2050.

Rokita provides an update on the abortion trial

Rokita also said Thursday that he would “proudly” defend Indiana’s abortion ban, which goes into effect Sept. 15, against a legal challenge filed Tuesday by a group of Indiana abortion providers. .

Rokita said he personally believes Bill 1 enshrined in the Senate should have “no exceptions” – it has four narrowly defined ones – but said his job is to “defend anything the legislature passes”.

A nearly 50-day investigation into Indiana obstetrician-gynecologist Dr. Caitlin Bernard, who performed an abortion on a 10-year-old rape victim from Ohio, is ongoing, Rokita said. His office says it is investigating whether Bernard violated patient reporting and confidentiality laws.

Bernard’s employer, Indiana University Health, told the Indianapolis Star in July that it found no privacy law violations during its internal review of the case. And the Indiana Department of Health released an aborted pregnancy report that seemed to clear Bernard up on the reporting issue.

When asked why the investigation has not yet been completed, Rokita replied, “We will go where the facts take us, as we conduct all of our investigations.”

“The speed at which it is concluded is really going to be determined by the cooperation that we get, not only from the subjects, but also from the third parties who are involved and [that] we need information,” he added.

Rokita spoke at a Facebook live event. His office required both credentialed reporters and everyday written email questions from the Hoosiers before and during the event, which a spokeswoman read aloud to Rokita.

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