EXCLUSIVE: Swing State’s Pension Funds Used To Advance ‘Racial Equity,’ Climate Initiatives, Report Finds

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Arizonans’ pension funds have repeatedly been leveraged to forward racial and climate-related resolutions at publicly traded companies, according to a report from conservative watchdog group American Accountability Foundation (AAF).

Arizona State Retirement System (ASRS) used Arizonans’ pension funds to back environmental, social and governance (ESG) shareholder resolutions on issues including race, gender, climate and politics, according to documents AAF obtained through a public records request. ASRS utilizes proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, who have each expressed support for ESG initiatives. (RELATED: EXCLUSIVE: Red State’s Pension Funds Used To Push Anti-Oil Shareholder Proposals, Report Finds)

“That Arizona retirees’ pension funds are being used to promote economically disastrous ESG policies should alarm every single state taxpayer, regardless of political affiliation,” Arizona state senator Jake Hoffman told the Daily Caller News Foundation. “Taxpayers entrust ASRS to provide and vigorously advocate for the retirements and other benefits for state employees — not to prioritize woke policies like ‘racial equity’ audits and defunding the American Left’s perceived political adversaries.”

There were 183 instances of ASRS voting in support of what the watchdog refers to as “woke” shareholder proposals. They include “racial equity audits, gender pay gap reports, efforts to defund conservative candidates and pro-business trade associations, radical climate policy, and pro-abortion initiatives,” AAF asserts.

For instance, ASRS voted to support a resolution for a “third-party, independent racial equity audit analyzing Walmart’s adverse impacts on Black, Indigenous, and People of Color (BIPOC) communities,” according to the proposal by United for Respect, which is a movement consisting of Walmart, Amazon and other retail employees. The retail giant “must do more to address significant adverse impacts of its policies and practices on those communities,” it states.

ASRS casts its own votes, the system confirmed to AAF in an email included in the watchdog’s report

“The Arizona State Retirement System acts in the best interests of the members and beneficiaries of the retirement system,” ASRS public affairs and media relations manager David Cannella told the DCNF.

Over 500,000 Arizona public servants are members of the ASRS, including state employees and personnel from schools in all 15 counties of the state, according to the system’s website. The system manages investments consisting of nearly $12 billion in U.S. stocks, according to documents it sent to AAF.

ASRS paid $49,000 to ISS and $20,000 to Glass Lewis in 2023, according to its financial report. The proxy votes in AAF’s report took place in 2022 and 2023.

“Pension fund and other clients of ISS can choose which voting guidelines best reflect the views of their underlying beneficiaries,” ISS told the DCNF. The proxy adviser also provided the DCNF with an example of one of their clients that specifically advocates against ESG proposals.

Both firms have advocated for ESG initiatives, stating they are in the best interest of investors. They dominate over 97% of the proxy advisory services market, according to Capital Policy Analytics.

ASRS voted to back a proposal for Boeing to disclose its “pay equity,” according to the resolution by James McRitchie of, which has a “mission … to help shareholders enhance the production of wealth by acting as long-term shareowners.” Yet another proposal at Boeing was for the aerospace company to issue a report on its efforts to achieve net zero greenhouse gas emissions.

“While Boeing reports diversity data, unadjusted median and adjusted pay gaps would show how Boeing assigns value to its employees,” the proposal states.

Critics say that ESG investments are not in the best fiduciary interest of shareholders.

“These documents reveal a dark collusion between state bureaucrats and woke corporations to use state pension funds to further a leftist ideological agenda,” AAF president Thomas Jones told the DCNF. “Not the people of Arizona, nor their representatives in the legislature, ever voted on these issues, yet these forces have taken it upon themselves to impose things like woke racial equity and climate radicalism. It is an outrageous betrayal of the people of Arizona.”

Funds that invest in green energy companies and products globally underwent investment outflows amounting to $4.8 billion in the first quarter of 2024, Reuters reported, citing analysis conducted by LSEG Lipper. The S&P Global Clean Energy Index has plunged by around 7% while the S&P 500 Energy Index, which features many oil and gas companies, is up by over 8% in 2024.

ASRS voted to support a resolution at Chevron for the oil giant to publish targets to cut down its greenhouse gas emissions to align with the Paris Climate Agreement, according to the proposal. The system also backed a proposal for AT&T to publish a report on its political expenditures and how they line up with the company’s values, according to the resolution by As You Sow, a nonprofit that assigns ESG scores to companies.

The nonprofit takes issue with how the telecommunications giant donates “to politicians and political organizations working to weaken women’s access to reproductive health care” and that it “is a member of the U.S. Chamber of Commerce which has consistently lobbied to roll back climate regulations and slow the transition toward a low carbon energy mix,” according to the proposal.

Groups, companies or individuals holding shares in publicly traded companies often propose resolutions intended to move corporate boards to take action on various measures.

Asset managers also leveraged Nevadans’ pension funds to advance similar proposals, the DCNF previously reported based on another public records request by AAF. Nevada Public Employee Retirement System enlists the services of asset managers like BlackRock, AllianceBernstein, Mellon Capital and State Street Global Advisors, who collectively manage over $30 billion of the system’s stock portfolio.

Glass Lewis did not respond to the DCNF’s request for comment.

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