On Tuesday, Arizona Treasurer Kimberly Yee and the members of the state’s Board of Investment rejected the controversial Environmental, Social and Governance (ESG) standards.
Yee and the Board approved revisions to the Arizona State Treasurer’s Office Investment Policy Statement, adopting language that ensures that “the Arizona State Treasurer’s Office investments are not subject to the subjective political whims” of the ESG standards.
“As Arizona’s Chief Banking and Investment Officer, my primary responsibility is to protect and safeguard more than $53 billion of taxpayer dollars moving through our office each year,” said Yee. “Since I took office in January of 2019, I have fought back against ESG policies imposed across the country. I have never mixed politics with the taxpayer’s money and our revised Investment Policy Statement ensures our office will prioritize safe investing over politically motivated agendas.”
The approved proposal states that non-pecuniary factors, which are part of the ESG standards, will continue to not be used in the investment decision making process.
“The Biden Administration is using its big government overreach to manipulate the private sector and force its hand in the business of picking winners and losers, based on radical ESG policies,” Yee said. “This is about maintaining American free-market principles that our country was founded upon and not allowing environmental or social goals to dictate how taxpayer monies are managed.”
Earlier in August, Yee notified Morningstar Inc. that they have 30 days to prove they are not violating Arizona law in actively boycotting the State of Israel, or they will be placed on the Arizona Treasury’s prohibited investment list.
Arizona law prohibits a public entity or public fund from entering a contract or directly invest moneys with a person or company that is engaged in boycotting Israel. The Arizona Treasurer’s Office determined that Morningstar’s ESG focused subsidiary, Sustainalytics, uses anti-Semitic and anti-Israel sources to negatively impact the scores of companies conducting business in Israel.
During the 2020 Legislative Session, Rep. Jake Hoffman sponsored a bill, HB2656, which would have prohibited banks from discriminating against people based on certain affiliations or values.
As previously reported, Hoffman crafted the bill in response to the expanded use of “environmental, social, and governance” (ESG) criteria, through which corporations and progressives screen customers and companies much like China’s social credit system. Under that system behavior that benefits the Chinese Communist Party is rewarded and behavior that does not serve the Party is punished.
Hoffman’s bill was killed by Rep. Joel John, who was overwhelming rejected in the 2022 Republican primary held in early August.
“ESG standards are nothing more than big government social engineering and discrimination. Treasurer Yee is absolutely right to reject them and put the taxpayers of Arizona first,” said Michael Carbone, who defeated Joel John in the Republican Primary.