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Investors, business groups warn that N.H. legislation puts taxpayers and retirees at risk

Investors, business groups warn that N.H. legislation puts taxpayers and retirees at risk

January 31st, 2024

Media Release


Investors, trade groups, and other organizations are making a powerful case to New Hampshire lawmakers this week, as they have already defeated one of two bills that would ban public institutions like the New Hampshire Retirement System from considering all risks as part of their investment strategies, threatening the retirement accounts of public employees and taxpayer funds. 

Impax Asset Management, New Hampshire Businesses for Social Responsibility, and Ceres are among those offering testimony in opposition to HB 1267 in a hearing Tuesday and SB 520 in a scheduled hearing on Wednesday. Following Tuesday's testimony, a House panel voted unanimously against HB 1267. 

Together, the two bills would restrict the New Hampshire pension fund and other state and local fiduciary officers from considering the environmental, social, or governmental risks that pose significant financial challenges to companies as they make investment decisions, or from working with financial firms that make those considerations. 

“In the Live Free or Die state, we should be encouraging free market choices – not undermining an individual's freedom to invest,” Ed Farrington, incoming President, North America at Impax Asset Management, said in testimony Tuesday. “To force individuals to ignore all investment factors – or to substitute the views of politicians for trained investment professionals – could lead to sub-par investment results and, in our opinion, result in a clear breach of fiduciary duty.”   

"Too often, acronyms become targets for partisan politics and the true value or meaning of their use gets lost in the rhetoric,” said Michelle Veasey, executive director, New Hampshire Businesses for Social Responsibility. “ESG ratings are used to understand how a company is doing, relative to others, on important issues like protecting customer data and privacy, worker training, chemical safety, executive compensation, etc.  ...  These are basic measures that help professionals in financial management fields understand all of the risks and opportunities that might be material to long-term financial success." 

“Investors must consider all risks and opportunities to ensure their organizations remain profitable over the long term, and that they fulfill their fiduciary responsibility on behalf of their beneficiaries,” said Alli Gold Roberts, senior director of state policy, Ceres. “By limiting the criteria state fund managers can consider, the state would be interfering with their ability to fulfill their fiduciary duties. It is not the role of government to dictate which considerations are allowed over the considered judgement of financial professionals in the field.” 

The New Hampshire bills are the latest in a surge of state legislation pushed by special interests across the country, to interfere with investment professionals’ ability to freely assess risk and opportunity. In New Hampshire, the state treasurer and retirement office have warned that the bills could reduce investment returns and conflict with existing state policy directing fiduciary officers to maximize financial benefits. 

Similar legislation in other states has proven to have negative ramifications for state and local finances and pension holders.  

➜ The Indiana State Legislative Services Commission last year projected a $6.7 billion decrease to pension fund returns because of a bill that mandates Indiana’s public pension system to divest from firms or funds that consider ESG-related factors. 

➜ Arkansas, Kansas, North Dakota, Texas, and Wyoming each also projected significant loss to pension returns from similar legislation.  

➜ And in less than a year after a similar law passed in Texas, the state had burdened taxpayers with $303-$532 million in additional interest on bonds — a direct result of restrictions on which banks are allowed to finance public debt.