Open Source: NC Treasurer has an ESG investing dilemma
I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly newsletter on business, labor and technology in North Carolina.
ESG has become a dirty acronym to many on the political right. Short for environmental, social and governance, ESG investing takes into account companies’ ethical values in addition to their financial returns.
Republicans nationwide have lambasted this investment approach, with more than a dozen states restricting their pension funds from ESG. North Carolina could join.
This week, GOP legislators moved along companion bills that would limit ESG investing in the state’s $114 billion public retirement fund.
The lightning rod that is ESG investing has presented an interesting dilemma for North Carolina State Treasurer (and gubernatorial candidate) Dale Folwell, whose duty it is to oversee the state pension fund.
Folwell is a Republican and a vocal critic of ESG. In December, he called on the head of the investment firm BlackRock to resign, citing the firm’s ESG support. Specifically, Folwell accused BlackRock and its CEO Larry Fink of “using the financial power of their clients to force the global warming agenda.”
South Carolina, West Virginia, and other states have divested their pension funds from BlackRock over ESG.
So, has Folwell removed BlackRock funds from the state pension?
No.
According to the Treasurer’s Office, the North Carolina Retirement System had $16.6 billion invested through BlackRock at the end of March (plus $65.5 million in BlackRock stocks/bonds). That’s more than the state had with BlackRock in December when Folwell called on its CEO to step down.
Why keep the money in BlackRock despite concerns about the firm’s ESG stance?
In a call this week with The News & Observer, Folwell cited the firm’s low fees and his overall fiduciary duty to get North Carolina the best investment return. Moving the money out of BlackRock, he estimated, would cost the state around $10 million.
Is Folwell coming around to ESG? It didn’t sound like it.
“We, and previous treasurers, hired Blackrock to manage our money and make money, not to politicize the money of the people of North Carolina with ESG philosophies,” he said.
Union battle brewing at local REI store
On Tuesday, REI workers, union leaders, and supporters rallied outside the outdoor apparel and supply store in Durham to support the workers’ ongoing union campaign. If successful, the 37-person staff will have their contracts collectively negotiated by the United Food and Commercial Workers International Union.
By unionizing, REI employees hope to achieve guaranteed minimum weekly hours, among other benefits. The National Labor Relations Board has not yet set a union election date.
REI, a co-op headquartered in Washington State, told The News & Observer in an email that it “supports the right of every eligible employee to vote in a store election as determined by the NLRB.”
But, employees and UFCW organizers say REI has worked against the union effort. An REI employee informed me that a union mitigation lawyer has visited the REI location, as have other managers from the company. And this week, the union filed an unfair labor practice against the company for allegedly retaliating against an employee involved in the organizing effort.
REI did not acknowledge that any of the visitors, including the mitigation lawyer, came to the Durham store because of the union push.
“We regularly provide stores with extra support when needed or high-traffic events like our recent member month promotion,” REI told The News & Observer. “This support is a regular co-op practice and is not atypical or unique.”
National Tech Happenings
▪ An artificial intelligence pioneer left Google, warning of the technology’s power.
▪ The Wall Street Journal reports some tech firms are trying to cheat the H-1B visa lottery by submitting the same workers’ names at multiple companies. I’ve previously written about the H-1B visa logjam and how it affects North Carolina workers.
▪ Want to learn more about AI’s present and future? “The Age of Artificial Intelligence” series from The New York Times is a good place to start.
Thank you for reading!
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published May 5, 2023 at 10:32 AM with the headline "Open Source: NC Treasurer has an ESG investing dilemma."
