Governor Lee Signs Bill Prohibiting ESG Investments in Tennessee

Governor Bill Lee signed a bill Wednesday that requires the Tennessee Treasurer to make investment decisions based on financial factors – not based on environmental, social, or governance (ESG) factors.

The bill, SB0955, was introduced by Tennessee State Senator Jack Johnson (R-Franklin) in January, two months after the U.S. Department of Labor announced the ESG rule which 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.

With Governor Lee’s signature, the Department of Labor’s ESG rule is now nullified in the State of Tennessee, requiring the state treasurer to focus solely on financial factors relative to the rate of return of a particular investment.

Lee joins the governors of Utah, Kentucky, West Virginia, Arkansas, Montana, and Florida who have all enacted bills against the ESG rule so far.

On a national level, President Joe Biden used his first veto in March to shoot down legislation that would have invalidated the Department of Labor’s ESG rule altogether, as previously reported by The Tennessee Star.

In a social media video, Biden said at the time, “I just signed this veto because the legislation passed by the Congress would put at risk the retirement savings of individuals across the country.

Biden further defended the Department of Labor’s rule in a separate statement, saying, “There is extensive evidence showing that environmental, social, and governance factors can have a material impact on markets, industries, and businesses. But the Republican-led resolution would force retirement managers to ignore these relevant risk factors, disregarding the principles of free markets and jeopardizing the life savings of working families and retirees.”

Following Biden’s veto, the bill failed to pass in the U.S. House of Representatives over veto.

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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network.
Photo “Gov Bill Lee” by Gov Bill Lee.

 

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2 Thoughts to “Governor Lee Signs Bill Prohibiting ESG Investments in Tennessee”

  1. Mark Knofler

    Bill taking the safe road. The public has no clue what an ESG is, but he’ll sign them red flag laws. Coward.

  2. Cannoneertwo

    I made quite a bit of money investing in the stock of companies that deal with recreational marijuana. Good for Bill Lee!

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