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In a recent op-ed in the Tennessee Lookout, professor of journalism and media at the University of Tennessee, Knoxville, Mark Harmon, argues that Tennessee Attorney General Jonathan Skrmetti’s lawsuit against BlackRock is merely a “silly crusade.” Skrmetti is suing Blackrock for violating Tennessee’s anti-responsible investing (ESG) law, which masquerades as a so-called “consumer protection” law. 

“Now that social good activities are lumped together and mocked under the nonsense ‘woke’ label, extremist Republicans in office have been clamoring against — and sometimes filing lawsuits against — ESG investing,” writes Harmon. “One could say Skrmetti is ‘non-virtue signaling’ to his radical right compatriots.”

Research shows corporate sustainability initiatives “drive better financial performance.”  The attacks from extreme politicians endanger “the financial stability of Americans’ retirement savings,” potentially resulting in losses worth billions of dollars from public pensions across the nation. 

  • The Kansas State Division of the Budget projected reduced returns of $3.6 billion over 10 years for the Kansas Public Retirement System if anti-ESG investment restrictions were adopted. 
  • The Arkansas Public Employees Retirement System  estimated they could lose $30-40 million each year due to an anti-ESG bill requiring public divestiture from institutions using ESG-related metrics. The Arkansas Teacher Retirement System estimated an additional $7 million in losses each year as a result of the legislation. 
  • According to the state’s Chief Investment Officer, the Oklahoma Public Employees Retirement System could face $9.7 million in taxes, fees and commission costs if it is forced to divest from BlackRock, Wells Fargo, JP Morgan Chase, State Street Corp, and Bank of America because of anti-ESG legislation. 
  • An economic analysis found that taxpayers in six states — Kentucky, Florida, Louisiana, Oklahoma, West Virginia and Missouri — could be on the hook for up to $700 million in excess interest payments if restrictions on sustainable investing are implemented.
  • A 2022 study found Texas’ anti-responsible investing laws would result in up to $500 million in undue interest over the first eight months of enforcement, costs which would ultimately be borne by taxpayers in the state.

“The details of the academic work can get a bit mind-numbing, but the trend is clear. ESG is overall beneficial and financially performs,” Harmon continues. “One of the works cites a 2015 analysis reviewing 2200 individual ESG studies.  Roughly nine in 10 showed a positive relationship between ESG and financial performance.”

To read the full op-ed, click HERE.