TOPEKA, Kan. (AP) – A proposal designed to thwart investing that considers environmental, social and governance factors has cleared the Kansas Legislature, but divisions within its GOP majorities kept the measure from being as strong as some conservatives wanted.
Lawmakers on Thursday approved a bill that would prevent the state, its pension fund for teachers and government workers and its cities, counties and local school districts from using ESG principles in investing their funds or in awarding contracts. Such investment strategies have become the target of GOP lawmakers across the country who argue they are focused more on pushing political agendas rather than earning the best returns.
At least seven states, including Oklahoma, Texas and West Virginia, have enacted anti-ESG laws in the past two years. GOP Govs. Ron DeSantis of Florida and Greg Gianforte of Montana also have moved to ensure their states’ funds aren’t invested using ESG principles.
Some conservatives lawmakers in Kansas wanted to require managers of private funds to either disclose to clients that ESG principles guide their investing or to get clients’ written consent to use ESG. Republican state senators backed a plan to force the state pension fund to divest from nations identified by the U. S. government as foreign adversaries, including China.
But proposals to impose new rules for private money managers spurred a strong backlash from influential business and banking groups. House members said the provision requiring the pension fund to divest from other nations was written so broadly that it would prevent investing in companies founded by immigrants fleeing oppression.
“We right here wanted to focus on what we control – state pensions, state investments, government contracts, stuff like that,” said Republican state Rep. Nick Hoheisel, of Wichita, chair of the House committee handling the legislation.
The votes to approve the bill were 76-47 in the House and 27-12 in the Senate and sent the measure to Democratic Gov. Laura Kelly. While almost all of the state’s Democratic lawmakers voted “no,” Kelly has not said what she will do. Supporters had the two-thirds majority needed to override a veto in the Senate, but not in …
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