STATEHOUSE— State Comptroller Elise Nieshalla, serving as a board member of the Indiana Public Retirement System (INPRS), welcomes a report to the Board from State Treasurer Daniel Elliot on fund manager BlackRock, Inc.
Nieshalla says the report offers needed insights into the company’s environmental, social, and governance (ESG) investing policies and how it incorporates non-financial factors in its investment decisions. The Treasurer’s findings were reported to the Board as required under a state law enacted in 2023.
“We need fund manager partners who balance fiduciary duty with market risks to maximize return rather than prioritizing non-financial factors such as social, political, and ideological interests,” Nieshalla stated. “As a board, we must review our relationship with BlackRock and its investing policies as a whole.”
Nieshalla’s comments follow the June 21, 2024, Board meeting, where the State Treasurer presented information that BlackRock prioritizes ESG factors over acting in the best interest of the beneficiaries and their investment returns. The report refers to the company’s Securities and Exchange Commission public filing that says, “management and reputational risks related to ESG engagement may cause revenue and earnings to decline.”
Nieshalla added, “I appreciate the efforts of our State Treasurer for his research and reporting and INPRS’ contribution to our due diligence as a board.”
Following Indiana statute, the next step requires the Board to consider other fund managers not engaged in prioritizing ESG factors comparable in financial performance to ensure the Board’s fiduciary duty to beneficiaries. The Board has 180 days to fulfill this duty.
