Louisiana Lawmakers Want to Restrict State Universities from Using ESG

Lawmakers in Louisiana are looking to restrict state universities from using environment, social and governance (“ESG”) criteria via a new house bill. Dubbed House Bill 909, the measure would require that state university boards first gain the approval of policymakers before deploying ESG-based criteria.

According to House Bill 909, public postsecondary education management boards as well as boards of regents at state universities would require the approval of the Joint Legislative Committee on the Budget before they launch any activities related to environment, social and governance-related activities.

Representative Charles Owen sponsored the measure and voluntarily deferred to avoid forcing a vote as the issue discussed in the bill needs “intricate study and analysis.” Furthermore, Owen said he has plans to write a resolution asking for an in-depth report on how higher education institutions in Louisiana are already instituting ESG criteria. Speaking last week when the House Education Committee took up his bill, Owen said the measure would grant the state legislature oversight over activities going on in Louisiana.

More specifically, Owen said, the measure would mandate the heads of the four boards of state universities to avail themselves before the legislature and outline all their ESG-related actions and any other parties they may be reporting to. As the legislature is responsible for deciding how the four institutions of higher learning are run, Owen said the ESG issue requires close attention. Consequently, the lawmaker said he wants to hunker down and figure out what’s going on in Louisiana’s state universities.

Owen equated ESG-based investments with the infamous social credit score used by Beijing based on residents’ behavior, echoing the negative sentiment shared by many conservatives toward ESG.

After being one of the hottest trends in the financial world for several years, ESG’s time in the limelight has been hampered by recent attacks by the Republican Party. According to conservative critics, ESG investing is essentially a form of political engineering that prizes pushing a liberal agenda over fulfilling the fiduciary duty of maximizing investor returns.

On the other hand, ESG supporters say these investments take the problems caused by racial-equity issues and climate change into account. Even so, ESG has seen a recent drop in popularity amid GOP attacks and reduced focus by major investment houses such as BlackRock, which were initially responsible for popularizing environmental, social and governance investing.

BlackRock, one of the largest asset-management houses on the globe, made ESG a core aspect of its investment strategy for several years and helped push the trend to the fore across the financial world. However, the company has reduced its focus on ESG as an investment strategy and even eliminated the term “ESG” from its internal communications.

Investment companies aside, individual enterprises such as Coyuchi Inc. seem as determined as ever to keep ramping up their implementation of ESG principles in the course of their operations. This commitment suggests that contrary to what detractors say, ESG can be beneficial to the bottom lines of the companies that implement it.

NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU

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