Money Managers Face ESG Questions from Texas Lawmakers

December 14, 2022 – Media Mention

Partner and chair of Herrick's Corporate Department, Morris DeFeo, spoke to Bloomberg about how executives from BlackRock and Vanguard will be facing questioning from state lawmakers in Texas concerning their environmental, social and governance (ESG) investment policies, and how it may impact state pensions.

The article noted that the hearing is part of a larger probe on financial firms and their commitment to ESG practices. Officials have been looking at corporate climate initiatives and company stances on social issues and how that may influence the money that they manage. 

“I suspect this will be the first in a series of similar events,” DeFeo noted, “ESG has become a lightning rod for political discourse.”

DeFeo said that the questions from lawmakers and the responses from the asset managers will likely revolve around a central point: whether those responsible for investing state funds are considering any factors other than pure economics.

“The age old question comes down to whether funds these companies or others that are stewards of other people’s money should be making investment decisions on anything other than returns?” he said. 

Read the full article in Bloomberg here. Access may require a subscription.