AUSTIN—The Texas Public Policy Foundation has learned that the Employees Retirement System (ERS) of Texas recently voted in favor of proposals at several of the largest U.S. banks, including Bank of America and Goldman Sachs, that would require the banks to stop providing financing for new fossil-fuel energy projects. ERS has a strict policy against supporting measures that purely endorse social policy and are unrelated to improving financial returns for its beneficiaries. By voting for these proposals, introduced by environmental activists including the Sierra Club and As You Sow, the pension fund clearly disobeyed its own rules on proxy voting.
“The policy states unequivocally that the fund will do what is in the best interest of ERS’ participants and beneficiaries and will not vote to endorse specific social policies,” said Jason Isaac, Director of TPPF’s Life:Powered initiative. “By adopting a proposal to prohibit investment in fossil fuels, ERS is violating its own rule to consider only what will protect and improve the economic value of fund. But the risk doesn’t just affect investors. If ERS fails because it took positions detrimental to its economic health, then taxpayers are on the hook.”