As the Biden administration looks to emphasize environmental, social, and governance standards, states are removing politics from pension fund investments.

Last year, Texas made the first move to remove politics from state workers’ retirement money. It introduced a law to prohibit state pensions from investing in or contracting with financial firms that boycott investment in oil and gas companies. Pursuant to the requirements of the law, the Texas Comptroller must keep track of financial firms that “boycott energy companies.” Over a specified period of time, state government agencies must “sell, redeem, divest, or withdraw all publicly traded securities” from the boycotting financial firm. The law provides exceptions for state governmental agencies to continue investing if they determine they will suffer losses from the divestment.