Louisiana House Bill HR137

Louisiana 2022 Regular Session

• Introduced: 5/16/22
• Refer: 5/17/22

Caption

Requests the state and statewide retirement systems to invest in companies that practice diversity, equity, and inclusion

Impact

If enacted, HR137 could have far-reaching implications for investment strategies employed by state and local retirement systems. The bill seeks to shift investment priorities toward firms that prioritize diversity and inclusivity, which may lead to significant changes in how investment portfolios are managed. Analysts suggest that such a shift could bolster companies that demonstrate commitment to social responsibility, potentially leading to increased economic benefits in the long run as diverse workplaces often yield higher profitability and wider market appeal.

Summary

HR137 requests state and statewide retirement systems to invest in companies that practice diversity, equity, and inclusion. The bill aims to enhance corporate accountability by aligning investment practices with broader social values. By encouraging the integration of diversity-focused criteria into investing strategies, proponents believe this bill will not only support ethical business practices but also enhance the financial performance of investments through diversified economic participation.

Sentiment

The sentiment surrounding HR137 is largely positive among its supporters, who argue that investing in companies with strong diversity, equity, and inclusion practices is a morally responsible choice that can positively influence social change. However, there are concerns primarily from critics who view such mandates as overreach, fearing that they may impose undue constraints on fund managers and limit investment opportunities by prioritizing social criteria over financial performance.

Contention

Various points of contention have emerged regarding HR137, particularly focused on the balance between ethical investing and the fiduciary duties owed by retirement fund managers. Critics assert that the bill may divert funds from potentially higher-performing investments if the focus shifts too heavily toward social factors, raising questions about the bill's long-term sustainability and effectiveness. Additionally, the testimonial and data backing the correlation between diversity practices and financial success remains a contentious topic, influencing opinions on the bill's necessity.