It was announced last month that the Indiana Public Retirement System could lose $6.7bn over ten years in reduced investment returns if it implements a bill barring the fund from investing with managers that use ESG. “And now we’re seeing a reaction to the reaction in states like Indiana and many other ‘reddish’ states where bills have died,” says [Steven M Rothstein, managing director at Ceres Accelerator for Sustainable Capital Market]..

In Kentucky, a state law from 2022 required divestment from money managers that ‘boycott’ energy firms. The law is similar to one introduced in Texas last year, which also banned investments with the likes of BlackRock, Citigroup and J.P. Morgan Chase.But some conservatives say this is too extreme. In response to the law passed in Kentucky, the Kentucky County Employees’ Retirement described it as “inconsistent with its fiduciary responsibilities”.

“In addition,” adds Rothstein, “many State banking associations in conservative states are saying they need to consider market and financial risks, including climate issues.”

Anti-ESG movement dials up the drama in the US – Capital Monitor