Texas AG Greg Abbot: he may be wrong, but he may be right.In a rush to push through well-intentioned and headline-grabbing divestment legislation targeting the multinationals that aid the genocidal regime in Sudan, politicians may be doing more damage to the movement than good.

Evidence of this backlash surfaced last week. Texas Attorney General Greg Abbott issued a statement that requiring divestment on any grounds would be contrary to the Texas constitution. As his reasoning goes, pension funds are to be run “for the sole benefit of pensioners”, so any bar set on moral grounds amounts to a diversion of funds.

Pending legislation is currently being debated in the Texas Legislature as well as at several county and municipal levels. Thankfully, the Attorney General neither writes laws, nor issues legal rulings. In my opinion, the move was meant to signal to lawmakers that he will be ready and willing to take up the cause against the legislation if, and when, it becomes law. He disputes the idea that the Legislature has the right to direct the pension trustees. Legislators respectfully disagree.

As a resident of Austin, I have observed the Attorney General, a Republican, and generally thought highly of his law enforcement and his avoidance of partisan hackery. Most Texans admire him for overcoming his disabilities (the AG is wheelchair-bound). On this issue, however, he is deeply mistaken. Setting guidelines about the fitness of a company for investment is what trustees and their managers do. That is what it is all about. Many pension funds worldwide, for example, require that companies have a listing on a major exchange. Pink sheet companies are forbidden. Others have guidelines that only “investment grade” bonds can be owned. Mostly, I find it highly relevant to pensioners to assume that companies who aid and abet genocide might not have the best interest of pensioners on their minds. Companies that make the right moral choices generally turn out to be the best stewards of investment money. They are not mutually exclusive propositions.

But, wait. After reading the statement and dismissing it as the ramblings of an ignorant bureaucrat, I actually reconsidered my opinion. Nationwide, divestment legislation is a mish-mash, differing widely in scope, flexibility, and targets. Most enacted or pending legislation is targeting the regimes in Sudan, Iran, and North Korea. However, other smaller divestment movements exist around animal rights, sweatshop labor, non-union labor, alchohol, gaming, abortion (on both sides), and others. Taken separately, I can begin to understand the fear facing pension managers. Pensioners do not need trustees that have to look over the shoulders of their managers on every transaction, and managers should not need to check with their attorney every time they want to make a trade.

All divestment movements would be well-served by simplifying and unifying. The legislation should be about forcing pension trustees to hear the voice of the people. Making judgements on moral grounds should not only be accepted, but expected. We should abandon the efforts to push through every single divestment agenda. Instead , we should focus on protecting the trustees’ authority to set moral guidelines and defeating ideas such as those coming from the AG’s office.

The California Public Employee Retirement System (Calpers) has operated with a social agenda for a few decades, and remains a leader in both performance and respect nationwide. The blueprint is there.

Mark Brandon is the owner of First Sustainable, a registered investment advisory catering to socially responsible investors.