Minnesota's State Investment Board will consider longer-term risks to pension investments such as climate change after passing a resolution Tuesday, but a group of protesters said they view the state's small investments in Israeli bonds and banks as being in conflict with that philosophy.

Environmental, social and governance — or ESG — has been part of the state's investment strategy for years. The philosophy means looking at risks and opportunities of companies when investing, beyond immediate earning potential of shares. On Tuesday, the state investment board passed a resolution to "consider all material risks and opportunities" of its investments, with state leaders underlining their interest in considering climate change risks.

"You've got to look out beyond the end of your nose," said Secretary of State Steve Simon in support of the resolution. Gov. Tim Walz noted other states have outright banned consideration of climate change in their investment strategies, and Attorney General Keith Ellison said he thought those states had seen losses.

Board of Investment Executive Director Jill Schurtz said Minnesota has preferred to take an active role as a shareholder in pushing companies to change their practices, rather than divesting. She spoke about a recent effort to get an energy company to cut down on the practice of "gas flaring," or burning excess natural gas as a means of getting rid of it.

Divestment, Schurtz said, "results in a change in the portfolio, but not carbon in the atmosphere."

Protesters called on the investment board to divest from Israel, joining a chorus urging divestment that has grown louder this spring as Israel's war in Gaza stretches on. Though Minnesota has only a small amount invested in Israeli bonds, protesters have called on both the state and the University of Minnesota to sell off their holdings in Israeli bonds, some Israeli companies and weapons makers to protest the war.

Video (00:16) A group of pro-Palestinian protesters called on the state investment board to divest from Israel on Tuesday, May 21, 2024.

About 50 people watched quietly during the investment board's discussion, many wearing black-and-white checked keffiyeh scarves and T-shirts with antiwar slogans written in black marker.

Several people spoke at the end of the meeting, urging the state investment board to divest from Israel's bonds, stock in Israeli banks and weapons manufacturers. Many said they considered these investments to be at odds with the environmental, social and governance principles the board spoke about.

The destabilizing effects of war should be one of those longer-range considerations, said Sam Limerick, one of several public employees who spoke because their pensions depend on the state investments.

"Confront the long-term risks of our investments in the military-industrial complex," he said.