Texas Lt. Gov. Dan Patrick ‘outraged’ by state pension fund’s climate change vote

AUSTIN – A significant Texas pension fund has taken a stance in opposition to fossil fuels, angering state Republicans who say the transfer defies a brand new legislation meant to help the oil and fuel business.

The Employees Retirement System of Texas voted by proxy for shareholder resolutions final week that ask banks to restrict financing for brand new fossil gasoline tasks.

It’s not clear whether or not ERS meant to again the proposals, which in the end failed. They have been championed by climate activists and directed at Bank of America, Citigroup, Goldman Sachs and Wells Fargo.

But the transfer by ERS – which manages $35 billion on behalf of state workers and retirees – spurred backlash on the GOP-led Legislature.

On Monday, Lt. Gov. Dan Patrick mentioned he was “outraged” by the pension fund’s actions that “go against the spirit” of recent state legal guidelines. Last 12 months, lawmakers barred state businesses from working with corporations that “boycott” the oil and fuel business.

“Our various investment funds’ focus should be on getting the best return on their funds,” mentioned Patrick, a two-term Republican who presides over the state Senate. “If companies they invest in take positions that harm Texas, they need to re-evaluate those investments.”

Patrick mentioned ERS pledged to “review and modify” its voting by proxy insurance policies to handle his issues, however provided no additional element. A proxy votes on behalf of an organization’s shareholder at investor conferences.

It’s not clear whether or not ERS meant to help the climate change resolutions.

Most proxy votes are solid based on ERS coverage and pointers, based on spokeswoman Mary Jane Wardlow.

“There may have been some disconnect between intent and edits that were made several years ago,” Wardlow mentioned in an announcement. “We became aware of the issue late last week and were in contact with our proxy advisor, Institutional Shareholder Services, to resolve the matter going forward.”

The new state legislation doesn’t deal with shareholder votes.

Instead, it bars state businesses from contracting with corporations that restrict their enterprise with the fossil gasoline business. The coverage additionally requires pension funds, equivalent to ERS and the Texas Retirement System, to divest from corporations that reduce ties with oil and fuel – as long as the strikes received’t trigger monetary hurt. The state Comptroller’s workplace started making a listing of blacklisted corporations earlier this 12 months.

Patrick prioritized the legislation following traders’ shift away from fossil gasoline. In latest years, universities, foundations and public pension funds throughout the nation have introduced plans to divest from oil, fuel and coal corporations in response to the rising risk of climate change.