(The Center Square) — A bill in the Louisiana House of Representatives would require university boards to seek approval from lawmakers before using environmental, social and governance criteria.
House Bill 909 would mandate the universities’ boards of regents and public postsecondary education management boards to ask for approval from the Joint Legislative Committee on the Budget before instituting any activities related to ESG.
The bill is sponsored by Rep. Charles Owen, R-Rosepine, and was taken up by the House Education Committee on Wednesday. He didn’t want to force a vote on his bill by voluntarily deferring it, but said the issue required “intricate study and analysis.”
He also said he wants to draft a resolution to ask for a in-depth report on how the state’s institutions of higher education are using ESG criteria.
“This bill, as it’s written now, means to ensure that this body, the Legislature, maintains oversight of what goes on in our state,” Owen told the House Education Committee on Wednesday. “Specifically, it requires the leaders of the four boards of our higher education institutions come before us and explain some of the things they’re doing in terms of who else they’re reporting to.
“This merits close attention because we in this body decide what goes on at those institutions. Those institutions report to us. They don’t report to Moody’s. They don’t report to people who aren’t in Louisiana unless we say it’s OK that they do. I want to drill down into this and find out what’s going on in our public institutions.”
Owen connected the ESG investments with the social credit score model as used in China, where the government issues an individual a score based on their behavior and what they can do.
Conservative critics say these type of investments amount to political engineering that advance a liberal agenda over the fiduciary responsibility to maximize returns for investors.
Supporters claim these type of investment strategies take in account the problems wrought by climate change and racial equity issues.
Louisiana has dealt with legislation before concerning ESG investment strategies, while several states have passed bills to restrict ESG-related investments with their pension funds.
