There is some good news for investors worried about the drive by Republican state legislatures to divest or prohibit investments in funds with environmental and sustainability goals. Some public pensions – the deep pockets that have fueled the rise of ESG funds – are pushing back against lawmakers who want to tie their hands.

Last week, Kentucky County Employees Retirement System voted to approve a letter to its state treasurer advising that the pension would not divest from any of the 11 financial institutions that the treasurer’s office has said is boycotting energy companies, per a report by affiliate title Responsible Investor.

“We live within a political world and I understand that, but I’m not looking at this for a political statement,” Michael Foster, who sits on the Kentucky CERS board of trustees, told RI. “I’m looking at it in terms of fulfilling our fiduciary responsibilities in the best way we can, and I don’t want to be limited from investing in these companies or similar companies if they best serve our retirement system.”

Kentucky CERS is the latest US pension to push back against fossil fuel divestments. Indiana Public Retirement System has warned that requiring it to divest from certain managers over fossil fuel issues could cause a significant reduction in investment returns.

The $37 billion retirement system warned in a fiscal impact statement that a proposed bill with similar requirements on divesting and ending business relationships with fossil fuel “boycotters” could cause a significant reduction in investment returns, RI reported.

Indiana PRS argued that provisions in the bill could effectively prohibit investments in private markets, as well as the use of active managers for its investments, which could also conflict with its legal obligation to provide a stable value fund for its defined contribution plan, RI reported.

The anti-ESG push has also been met with resistance in North Dakota, where 90 lawmakers reportedly voted against an anti-ESG bill and just three voted to approve it.

Responsible Investor reported:

Lise Kruse, commissioner of the North Dakota Department of Financial Institutions, said in January: “We expect banks to have strong risk management principles in place, but we do not go as far as dictating a bank’s business strategy or what particular niche they decide to pursue expertise in. If a bank decides to serve certain customers and industries, as long as it is done in a safe and sound manner, that is a business decision that we agree government should not be involved in.”

Those pushing back against the anti-ESG movement face an uphill battle. As of December 1, at least 10 states – including Arizona, Florida and Texas – had enacted anti-ESG legislation, while another seven states had issued anti-ESG position statements or were considering anti-ESG bills, according to research published by law firm Morgan Lewis.

Witold Henisz, a vice dean at Wharton who is faculty director of its ESG Initiative, has said ESG supporters have no choice but to fight. In an opinion piece titled “How to Confront the Anti-ESG Campaign,” Henisz wrote:

Climate risk is investment risk. There is no credible other side, only an ideological opposition cynically seeking a wedge issue for upcoming political campaigns — and, so far, it appears to be working. Proponents of climate science and more sustainable investing need to plan and execute their counterattack. Silence in the face of such an attack is complicity. Which side are you on?