New Hampshire Gov. Chris Sununu has signed off on a national effort to oppose ESG-based investing, including possibly “leveraging state pension funds” to oppose what critics call ‘woke’ economic policy.
The letter, signed by Sununu and 18 of his fellow Republican governors, is a response to the Biden administration’s Department of Labor reversing a Trump administration reading of the 1974 Employee Retirement Income Security Act, which required retirement plan managers to consider only factors that have a “material effect” on investments.
Under the new rule, fund managers would be allowed to consider so-called Environmental, Social, and Governance (ESG) issues — like a company’s green energy policies or the racial diversity of its employees — when investing retirement funds. Both the House and Senate voted to block the rule change, with the help of Democrats like Rep. Chris Pappas (N.H.) and Sens. Joe Manchin (W.V.) and Jon Tester (Mont.)
“I’m opposing this Biden administration rule because I believe it undermines retirement accounts for working Montanans and is wrong for my state,” Tester said in a statement.
Both New Hampshire Sens. Maggie Hassan and Jeanne Shaheen voted to uphold the ESG rule, and Biden has pledged to veto the legislation overturning the new rule.
“Yet again, President Biden put his political agenda above the wellbeing and individual freedoms of hardworking Americans,” Sununu and his fellow governors wrote.
“Retirees, already suffering from the reckless fiscal policies of the Biden Administration, will continue to experience diminished returns on the investment of their hard-earned money while the corporate elite continue to use their economic power to impose policies on the country that they could not achieve at the ballot box,” the governors said.
And they threatened to take action in response.
“To protect individuals from the ESG movement that threatens the vitality of the American economy and Americans’ economic freedom, we agree to lead state-level efforts,” they wrote. “This may include blocking the use of ESG in all investment decisions at the state and local level, ensuring that only financial factors are considered to maximize the return on investment, protecting retirees and taxpayers alike.
“This may also include eliminating consideration of ESG factors by state and local governments when issuing bonds or prohibiting state fund managers from considering ESG factors when investing taxpayer money.”
According to the New Hampshire Retirement System, the state’s trust fund “stood at $11.57 billion at the close of the fiscal year ending June 30, 2021.”
Free market advocates praised the governors’ approach.
“Studies show that ESG funds return over 2.5 percent less than the industry average,” said Greg Moore, state director of Americans for Prosperity New Hampshire. “Over the course of a career, that difference could mean the difference between being able to stay in your own home as a senior or being forced to downsize; or the difference between being able to help your grandchild through college or not. All of this to help out liberals’ buddies to achieve their ‘woke’ goals.
“This ESG rule needs to stop so that people saving for their retirement can have the confidence that their money is being invested in their best interests,” Moore said.
Sununu has been considering a 2024 presidential bid, and opposing ‘woke’ economic policy is popular with the GOP base. Potential 2024 contenders Govs. Ron DeSantis (Fla.), Brian Kemp (Ga.), and Kristi Noem (S.D.) also signed the letter, which was released by the Republican Governors Association.
“As Governors, we are committed to protecting the interests of our constituents and will keep fighting the Administration’s decision to jeopardize retirement savings for millions of Americans to promote far-left priorities.”