ESG Fight Injects Fresh Risks Into Public Pension Portfolios

When Florida Governor Ron DeSantis emerged as one of the most vocal critics of so-called woke money managers, he thrust the state’s pension funds into a red-hot debate.

On one side are Republicans, who say ESG investment strategies leave returns on the table for the sake of political correctness. On the other are Democrats who argue failing to account for climate change will exact steep financial costs in the long term.

Both say they’re upholding their fiduciary duty to act in the best interests of clients. Making investment decisions based on anything other than performance would violate that obligation. But ...