Gov. Phil Murphy vetoed a bill that would have allowed the state’s public worker pension fund to impose social justice conditions on companies it invests in, arguing the language of the bill was too broad and could jeopardize the success of the pension system.
Senate Bill 2663, which Murphy vetoed on Thursday, would have required the Division of Investment and the State Investment Council to outline conditions on how companies act – putting a so-called “responsible contractor policy” into place.
That policy would be meant to ensure that anyone selected by the retirement system – such as contractors, investors, consultants and managers – promoted “fair wages and benefits” among their workers.
The conditions would have been applicable to any real estate and infrastructure project where the pension fund had an “active” controlling investment, that is, at least 50 percent.
“I commend the sponsors for their efforts to ensure that our pension dollars are invested in entities that adhere to responsible labor practices that appropriately protect workers,” Murphy wrote in a Thursday veto statement.
“I am concerned, however, that this bill creates broad proscriptions on the state’s investment practices that would be challenging for the division to implement and could jeopardize the overall health of the systems,” Murphy added.
The new policy, Murphy said, could have meant the treasury moved away from well-established investment strategies.
Murphy also said that the state’s investment division and council already have adopted an “Environmental, Social and Governance” policy which, like much in the language of S2663, encourage policies that promote “workforce diversity, fair trade, working conditions and equitability of compensation” in investees.
That alone would be sufficient to meet many of the goals laid out in the proposal, Murphy said.
The Senate Majority Office could not be reached for comment.