Responsible investing remains ‘common sense’: MassPRIM chair

Trustee of Massachusetts PRIM said investing with a stewardship and sustainability-conscious approach remains “common sense” for the $116 billion fund, though she said it has been harder for the investor to access some ESG-related information from managers and companies.

Massachusetts state Treasurer Deborah Goldberg, who chairs a nine-person board for MassPRIM, proposed to establish an ESG committee for the fund in early 2022, which held its inaugural meeting in 2023. The four priorities of climate transition planning, fair pay, sustainable forestry and transparency which are considerations incorporated into all of its portfolio investments.

“I came out of the grocery business, and what I’ve always said for years now, as others have challenged some of the ways in which we do things and use buzzwords that aren’t necessarily complementary, [is] we do things in a common-sense way,” she told the Fiduciary Investors Symposium at Harvard University.

“If you’re telling me that I should not be looking, for example, at how fires are going to impact my timberland, that to me doesn’t make good common sense.”

The fund engages with its external managers and portfolio companies to understand how they are handling climate risks, but Goldberg observed that the task is not always easy, especially given the hostility from the Trump administration to ESG and diversity issues.

“As geopolitical dynamics fluctuate, this work is even more essential to risk mitigation. Sometimes the information that we’re getting, there’s a great deal of resistance to actually giving it to us, and we have seen that begin to escalate,” she said.

Goldberg submitted a letter to the US Securities and Exchange Commission last year alongside 16 other Blue state treasurers, rebutting calls from Red states for the SEC and the US Department of Labor to prohibit the use of ESG and DEI policies among retirement plans and asset managers.

The letter argued that if operating under this “regulatory overreach”, US investors and pension plans would become less competitive and more prone to market volatility compared to global funds which are not operating under the same restrictions.

“PRIM is in the forefront of sustainable investing by standing up its first-of-the-kind stewardship and sustainability committee. I can proudly say I had a lot to do with that, and this approach to stewardship is forward thinking and innovative, while remaining anchored to our fiduciary duty to ensure the long-term value to the PRIM fund,” Goldberg said at the symposium.

She urged fiduciary investors to stay open-minded to ideas and possibilities in the world.

“My theories are not based on ideals, they’re based on what I believe lets you be successful,” she said.

“So, my advice is [to] be open and willing to think in ways that you necessarily haven’t thought of before, and how it ties in to being financially successful on behalf of your beneficiaries. One is not exclusive from the other.”