While other Republican-led states have taken comprehensive action to protect their citizens and pension funds from ideologically driven investment practices, Alabama has fallen dangerously behind in safeguarding its financial interests.
According to Ballotpedia, “36 states have enacted 137 bills either opposing or supporting environmental, social, and corporate governance (ESG) investing between 2020 and 2025.” The data reveal a clear pattern for conservatives: “22 out of 23 Republican trifecta states enacted legislation opposing ESG between 2020 and 2025.”
Of those states, Ballotpedia says that “18 enacted sole fiduciary legislation” (Alabama has not); “14 enacted anti-boycott legislation” (Alabama has); “13 enacted anti-discrimination legislation” (Alabama has enacted such legislation in part, applying only to public entities and higher education, but not extending to measures against social credit–style practices or other forms of discrimination by financial institutions, such as merchant category codes or similar banking policies); “10 enacted public disclosure requirement legislation” (Alabama has not), “6 enacted legislation opposing federal ESG mandates” (Alabama has not), and “1 enacted consumer and investor protection legislation” (Alabama has not).
Strangely, Alabama, a Republican trifecta state, trails many of its conservative peers.
Alabama Gov. Kay Ivey signed legislation on June 6, 2023, “banning state contracts with companies that engage in ESG-related boycotts,” Ballotpedia explains. This legislation prohibits, among other things, governmental entities from requiring private businesses to boycott firms or industries based on ESG factors.
While this statute may seem like a positive first step, it represents only a fraction of the comprehensive ESG opposition framework that Alabama’s conservative peer states have implemented.
The 2025 legislative session presents a critical opportunity for Alabama to catch up with its conservative counterparts. Alabama should prioritize sole fiduciary duty legislation that requires pension fund managers to prioritize financial returns over political considerations. The state also needs enhanced anti-boycott protections that extend beyond the current limited scope of the existing legislation (i.e., a review of the bill that passed in 2023).
Public-disclosure requirements represent another essential component that Alabama is missing. The Retirement Systems of Alabama (RSA) conducts its business behind a veil of secrecy so impenetrable that a man attempting to extract even the most elementary facts from its bowels might as well try to squeeze blood from a turnip.
Every Alabamian, let alone every public employee in the state, should immediately know answers to these questions:
Which external investment firms, if any, manage the state’s pension fund assets? Or does RSA manage those assets itself? Does the external manager (if there is one) vote proxies on behalf of the pension funds? Does RSA itself vote any proxies or retain authority to direct specific votes? Would RSA consider making this information publicly available?
Larry Fink, the CEO of BlackRock, announced in 2023 that he intended to back away from the acronym ESG. Yet elements of ESG remain within the new label BlackRock has adopted to replace it – what the firm now calls “transition investing” (see here, here, here, and here).
According to Yahoo Finance, public reports as of June 30, 2025, list BlackRock as the second-largest institutional shareholder of Regions Financial, behind Vanguard and just ahead of State Street, collectively known as the Big Three. So don’t be surprised to find Regions sneaking ESG activity under another name.
In fact, Regions appears to have rebranded its ESG reports as a “Shared Value Report.” Look inside, and you’ll find all the trappings of ESG, including disclosures related to energy, emissions, diversity and equal opportunity, and more.
Alabama’s citizens, retirees and taxpayers deserve the same protections that residents of other conservative states already enjoy.
The question isn’t whether Alabama should act on ESG. It’s whether our elected officials will show the leadership necessary to protect Alabama’s financial future.
Allen Mendenhall is a Senior Advisor for the Capital Markets Initiative at the Heritage Foundation. A lawyer with a Ph.D. in English from Auburn University, he has taught at multiple colleges and universities across Alabama and is the author or editor of nine books. Learn more at AllenMendenhall.com.
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to [email protected].
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