Indiana chamber says anti-ESG pension bill may stall in the House

The Indiana Chamber of Commerce said a revised fiscal note on a bill that would bar the state’s pension system from putting its money in so-called socially conscious investments is likely to stall after an analysis found it could cost the state billions of dollars in investment returns.

House Bill 1008, sponsored by state Rep. Ethan Manning, R-Logansport, would prevent the Indiana Public Retirement System from working with outside managers or firms that pursue or promote ESG investments. ESG stands for environmental, social and governance, and such investments typically are focused on companies that promote sustainable practices.

The amended fiscal note was published Saturday on the bill and noted an INPRS projection the bill could slash returns by $6.7 billion over the next 10 years.

“Large decreases in investment earnings would result in increased unfunded liability in the defined benefit funds, requiring a significant increase in employer contributions and state fund appropriations over time to make up for lower investment returns,” the note stated.

The note also indicated the bill could bar investments in private equity and preclude INPRS from working with active fund managers.

Manning’s bill passed out of the House Committee on Financial Institutions last week by a 9-4 vote. Chamber President and CEO Kevin Brinegar said Tuesday most of the testimony had little to do with the actual bill itself or the state’s pension plans.

“This was more of a symbolic piece of legislation,” he said. “This new development in our view... I think makes it very difficult for the House to move forward on this.”

Manning immediately for comment.

Brinegar said there’s an alternative proposal in the Senate he called comparable but had “significant” differences.

“That bill simply says what is already the practice of INPRS is that their responsibility and their goal is to invest in a way that achieves the maximum return for the was not available least amount of risk and strikes a balance there,” he said. “And indications that we’ve had from our friends in the Senate is that that’s about as far as they’re willing to go.”

The House Financial Institutions Committee passed the bill last week. The House Ways and Means Committee was scheduled to hold a hearing on the bill Wednesday, but that hearing has since been moved to Monday.