Last week, Virginia’s attorney general released an advisory opinion directing the Virginia retirement system in the state against making investment decisions that prioritized environmental, social and governance (ESG) issues. The attorney general, Jason Miyares, explained in the nonbinding legal analysis that the state’s retirement system needed to base its investments on what would generate the best financial results for its beneficiaries.
Members of the state’s retirement systems include public school teachers, state employees and employees of political subdivisions, such as cities, towns and counties.
In a statement, Miyares explained that investments needed to be driven by calculated and careful financial foresight and not confused by baseless ESG fads. He noted that this opinion reinforced the retirement system’s legal obligation and responsibility to make investment decisions free from any political or social agendas.
The statement comes after some pensions programs in Virginia chose to prioritize ESG policies when making investments.
In an email, retirement system spokesperson Virginia Sowers explained that the system didn’t have policies to prioritize such investments. Sowers noted that if the retirement system was to meet its fiduciary duty, it needed to carefully evaluate monetary risk and analyze economic factors to achieve high return levels over the long term. She added that this didn’t include deploying dedicated ESG funds or reviewing investments via a social screen.
Currently, states such as Maryland and Illinois are required to consider climate and sustainability risks when making decisions related to their assets. Over in Maine, a policy approved in 2021 requires that the pension fund divest from fossil fuels by 2026.
Other states that have drafted and implements regulations against ESG investing include Kansas, Indiana and Florida, among others.
Lawmakers in Virginia recently considered a 2022 resolution that would require the state’s retirement system and other local systems to divest from fossil fuel companies by Jan. 1, 2027. This measure wasn’t passed into law though. The legislators also considered a separate 2023 resolution that would limit investments based on political and environmental factors. This bill wasn’t implemented either.
This recent opinion was the AG’s 10th opinion memo this year and was penned at the request of GOP’s Delegate Nick Freitas, a member of the state’s House of Delegates. As per the law, the AG shall give his advice and offer official advisory opinions in writing only when requested by the governor, a judge, a member of the General Assembly, a county or city sheriff, the state’s Corporation Commission, or a county or city treasurer, among others.
Despite these developments pushing back against ESG, there are many companies, such as Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF), that are embracing these principles and finding ways to incorporate them into every layer of their operations.
NOTE TO INVESTORS: The latest news and updates relating to Reflex Advanced Materials Corp. (CSE: RFLX) (OTCQB: RFLXF) are available in the company’s newsroom at https://ibn.fm/RFLXF
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