Kansas becomes the 14th state to prohibit Environmental, Social, and Governance (ESG) considerations in state pension funds. 

Kansas Governor Laura Kelly, a second-term Democrat, will allow an anti-ESG bill to become law without her signature since Republicans boast veto-proof majorities in the state legislature. 

House Bill 2100, or the Kansas Public Investments and Contracts Protection Act, also bars the state from engaging in business with financial services that discriminate against the energy, agriculture, or firearms industries, for instance. The law goes into effect on July 1, 2023.

“This bill will ensure that public dollars – particularly our state pension fund – are invested in ways that produce the highest possible returns with the lowest acceptable risk, and that public contracts are awarded to the entities best-qualified to fulfill them,” said Kansas State Treasurer Steven Johnson. “I am encouraged that Gov. Kelly allowed this bill to become law without her signature. There is a broad consensus that so-called environmental, social or governance (ESG) criteria should not take the place of traditional fiduciary principles in decisions about how taxpayer dollars are spent and invested. I commend the members of the Legislature for their work on this important legislation.”

As I noted at IWF recently, the ESG movement—namely its reporting regime—is destroying companies from within: 

Publicly traded companies spend an average of $220,000 and $480,000 annually to boost their ESG ratings compared to private companies (which pay between $220,000 and $480,000 annually). In contrast, investors spend an average of $175,000 to $360,000 annually to improve their standing.

The anti-ESG movement continues to gain traction and support nationwide. 

As of March 2023, 19 states—with the addition of Virginia—joined Governor Ron DeSantis (R-FL)’s alliance to quash the ESG movement in their respective states. 

This week, Indiana lawmakers passed a similar bill that awaits a signature from Governor Eric Holcomb (R-IN). This legislative trend is consistent with growing criticism within the business world. A new Deloitte survey found there’s low confidence—fewer than half (45.7%) of industry professionals—in ESG reporting. 

To learn more about ESG go HERE.