- 2023, Financial, Government
Bans ESG investment strategies by the state of Tennessee.
HB 1286 / SB 955
Bill Description
Bill Sponsors
Rep. Jason Zachary
Sen. Jack Johnson
Bill Co-Sponsors
House: Terry, Lafferty, Hawk, Davis, Vital, Sherrell, Moody, Grills, Powers, Todd, Cepicky, Ragan, Richey, Martin B
Senate: Walley, White, Yager, Bailey, Bowling, Crowe, Gardenhire, Niceley, Reeves, Rose, Stevens, Taylor
TLRC Statement on Bill
We support this bill. However, read the fine print and understand what this bill does not do.
The bill simply directs the Treasurer not to take into consideration Environmental, Social, and Governance (ESG) interests when making investment determinations for the state of Tennessee. Only a financial analysis should be taken into consideration. In other words, the state of Tennessee is not going to concern itself with its ESG score.
However, it does not in any way limit the Treasurer from investing taxpayer dollars into any investment that has ESG considerations, so long as it is not a determining factor for making the investment. Additionally, the state may continue to invest funds indiscriminately regardless of whether or not our tax dollars might be funding an interest that runs contrary to the public policy of this state concerning any social agenda.
Lastly, in no way does this bill protect the consumer from discriminatory banking practices utilizing ESG standards. HB 728 / SB 1091 would have made some strides in that direction but failed in committee in the Senate.
This is a fantastic example of a bill that makes a great headline doing something while doing almost nothing. A vote in favor of this bill is still a good vote. However, the bill sponsors are earning no brownie points here for a fairly lackluster effort.
