McRae urges PERS to reject ESG policies

Mississippi State Treasurer David McRae on Monday, Nov. 14 issued a letter to Public Employees’ Retirement System of Mississippi (PERS) board members, urging the officers to reject Environmental, Social, and Governance (ESG) policies.

“Our job is to maximize financial returns for the more than 18,000 members of PERS,” wrote McRae. “I have grown deeply concerned that the actions of New York investment firms, however, are jeopardizing this system and failing to uphold their fiduciary responsibilities to us.”

ESG investing screens corporate actions as they relate to climate change policies, gender diversity, and more. While these strategies have lured the attention of liberal-leaning Wall Street powerhouses, ESG returns tend to be markedly lower than their conventional counterparts.

McRae noted that many New York City asset managers have begun to offer ESG options, but BlackRock, Inc., has adopted one of the most aggressive postures. As such, McRae’s letter also urges the PERS Board to “fully divest pension system funds from BlackRock, Inc.” He also encourages the Board to “formally prohibit the use of any consideration besides financial performance in its investment policy.”

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