Connecticut Senate Bill SB00971

Connecticut 2021 Regular Session

• Introduced: 2/26/21
• Refer: 2/26/21
• Report Pass: 3/31/21
• Refer: 4/15/21
• Report Pass: 4/21/21
• Engrossed: 6/2/21
• Report Pass: 6/3/21

Caption

An Act Concerning The State Treasurer And Climate Change And Coastal Resiliency Reserve Funds.

Impact

The proposed amendments to the investment policy for the Climate Change and Coastal Resiliency Reserve Fund would empower municipalities to allocate more of their funds into equity investments, up to 40% or even 50% if specific asset allocation policies are adopted. By diversifying the types of investments, the bill would potentially increase the financial resources available for climate adaptation measures. However, it also raises concerns about the risks associated with greater exposure to equity markets, underscoring a need for careful investment strategies to safeguard funds intended for crucial climate resilience efforts.

Summary

SB00971, titled 'An Act Concerning The State Treasurer And Climate Change And Coastal Resiliency Reserve Funds,' seeks to amend existing statutes regarding the investment policies of reserve funds related to climate change and coastal resiliency. The bill aims to enhance the ability of municipalities to effectively manage their reserve funds by allowing them to invest a significant portion in equity securities and other rated obligations. This change is designed to improve financial returns from these investments, reflecting a response to increasing climate-related challenges faced by the state.

Sentiment

The sentiment regarding SB00971 appears to be largely supportive among lawmakers and community advocates focused on climate resilience. Proponents argue that the bill represents a necessary evolution in how climate-related funds are managed, advocating for proactive approaches to investing in a way that directly ties to long-term sustainability goals. Conversely, there may be apprehensions regarding the riskiness associated with equity investments, emphasizing a tension between the potential for higher returns and the necessity of protecting public funds.

Contention

A notable point of contention centers around the balance between risk and reward in investments tied to climate resilience. Critics of investing a significant portion of the reserve funds into equity markets worry about the volatility and unpredictability of such investments, especially in the context of funds meant for safeguarding the community against climate impacts. Stakeholders may argue that more conservative investment strategies should be prioritized to ensure consistent capital availability for urgent climate resilience projects.