Texas Public Employee System Adopts Social Investing Policy

February 28, 2008 (PLANSPONSOR.com) - In response to pressure for the fund to sell its holdings in companies that do business in Sudan and Iran, trustees of the Employees Retirement System of Texas on Tuesday approved a social-investing policy.

The Austin American Statesman reports the new policy allows its board to take social investing requests on a case-by-case basis. The board can reject a request or ask its staff to determine the legal and financial impact the request could have on the fund.

If a request is accepted, a list of offending companies would be compiled and the companies would be asked to change their policies. The fund can only sell the shares if it could make another investment that would produce similar returns, according to the American Statesman.

The caveat is similar to that in the divestiture policy adopted by Texas Teacher Retirement System trustees in December (See Texas Fund Divestiture Policy Includes Caveat ).

Governor Rick Perry signed legislation this year that requires the two systems to sell shares of companies that do business in Sudan (See Texas House Approves Sudan Divestment Bill). When identifying such investments as required by the new law, the fundsdiscovered that a small percentage of their holdings are invested in Sudan-linked companies (See Texas Funds’ Sudan-linked Investments Relatively Small ).

The American Statesman report said the same is not true of Iran-linked holdings. The public employees system said it holds nearly $230 million in shares of companies identified as doing business there by the American Israel Public Affairs Committee. The fund has $24 billion in assets.