Americans for Prosperity Applauds Passage of Bill Prohibiting ESG Investments in Tennessee

Americans for Prosperity – Tennessee (AFP-TN) applauded the state Senate’s passing of a bill that requires the Tennessee Treasurer to make investment decisions based on financial factors – not based on environmental, social, or governance (ESG) factors.

“We commend Leader Johnson and Treasurer Lillard on their efforts to protect Tennesseans’ retirement savings by ensuring fiduciary responsibility and prohibiting unsound, politically motivated ESG investments,” AFP-TN State Director Tori Venable said in a statement.

The measure stems from November of last year, when the U.S. Department of Labor announced the ESG rule. The rule allows retirement plan managers to consider environmental and social issues when making investment decisions instead of focusing on financial factors relative to the rate of return.

Following the Department of Labor’s enactment of the ESG rule, Tennessee State Senator Jack Johnson (R-Franklin) introduced a bill in the Senate that would nullify the department’s rule in the State of Tennessee.

Thank you Leader @SenJohnson for bringing #SB955 to protect Tennesseans retirements from #ESG. #TNleg pic.twitter.com/xFIc8dLB2R

— AFPTN (@AFPTN) March 13, 2023

The bill, SB0955/HB1286, would “restrict the treasurer to focus solely on financial factors relative to the rate of return of a particular investment,” State Senator Johnson explained on Monday during the Senate’s third and final vote on the bill.

During Monday’s discussion on the bill, State Senator Todd Gardenhire (R-Chattanooga) argued in favor of Johnson’s legislation, citing a recent study in the Wall Street Journal comparing the rate of return in companies that promote the ESG as opposed to those that do not promote it, which showed the difference in the rate of return as over 5 percent a year – on the “negative side,” as Gardenhire put it.

Gardenhire added that there are three counties in his district where the state pension fund is the largest payroll of the entire county, saying, “I can assure you that those folks on retirement and that fixed income want us to manage this money for the best return.”

The bill passed by a 27-4 vote.

Bill to stop political whims from draining your retirement fund with #ESG just passed @tnsenate. Thank you to all the Yes votes & Treasurer Lillard. #KeyVote #SB955 #TNleg pic.twitter.com/GjiNJqOKv3

— AFPTN (@AFPTN) March 13, 2023

“Tonight’s vote in the Senate shows that Tennessee will not bow to the woke, radical agenda of environmental, social, and corporate governance goals,” Venable said.

“Just last month, grassroots efforts made it clear they did not want radical ESG ideals holding their retirement accounts hostage. Today, I am proud to see Tennessee make the same choice,” Venable added.

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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network.
Photo “Jack Johnson” by AFPTN.