LINCOLN- During a meeting in June, the Nebraska Investment Council, in response to concerns surrounding so-called "environmental, social, and governance" investing, voted to allow a third-party proxy service provider to cast proxy votes on behalf of the state, meaning that the state will no longer defer to BlackRock, the state's chief financial adviser, when making investment decisions. "We wanted to make sure, to the extent we are able, that our proxy voted for our stockholdings are made solely on the basis of financial materiality," said Michael Walden-Newman, the state's investment officer.

The hiring of a new proxy consultant is expected to cost the state around $100,000. BlackRock, the world's largest investment management company, had become a target of criticism after its CEO Larry Fink declared that environmental, social, and governance issues should be considered when making investments. This drew the ire of then-Attorney General Doug Peterson, who released a critical report last December, and even prompted the introduction of two bills in the Nebraska Legislature that would have banned the use of ESG when making investment decisions.

ESG has become a heated culture war issue, with some arguing that it advances a liberal agenda while investing in companies or ideas that may not offer maximized returns. In his report, Peterson had called ESG "a threat to our democratic form of government," prompting two University of Nebraska-Lincoln professors to accuse Peterson of acting in "political theater." Although the two ESG-related bills in the Nebraska Legislature failed to advance, an interim study, requested by Sen. Kathleen Kauth, is set to discuss its effects on investing in Nebraska.

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