Big pension funds back use of ESG in investing decisions

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For more than a year, Republican-led states and the influential groups backing those officials have been running a vocal campaign to restrict fund managers' ability to consider environmental, social and governance factors when making investments.

Now, 270 businesses, banks, advocacy groups and public retirement funds are pushing back. Two of the nation's largest state pension programs — the $306 billion California State Teachers Retirement System and the $242 billion New York State Common Retirement Fund — were among signatories to a "Freedom to Invest" initiative launched March 23 by the investor advocacy network Ceres.

The signatories urged federal and state lawmakers to protect their fiduciary duties and ability to make investment decisions that best serve their shareholders and beneficiaries for the long term.

Boston Trust Walden Co., Trillium Investments LLC, Franklin Templeton, a subsidiary of Franklin Resources Inc., and several other financial firms joined the effort.

"When you're an investor, you have something old-fashioned and a really important thing to do, and it's called fiduciary duty," Anne Simpson, global head of sustainability for the asset management firm Franklin Templeton, said at a Ceres media briefing. "We're trying to take care of close to $1.4 trillion. That's not our money; it belongs to the people who put their trust in us. There is no situation in which we can ... ignore something that might be relevant to risk or return."

[Karin Rives]

More: 270 companies, major pension funds join pro-ESG 'Freedom to Invest' campaign