North Carolina 2023-2024 Regular Session

North Carolina Senate Bill S737

Introduced
4/6/23  
Refer
4/10/23  
Refer
4/13/23  
Report Pass
4/25/23  
Refer
4/25/23  
Report Pass
5/2/23  
Refer
5/2/23  
Report Pass
5/3/23  
Engrossed
5/3/23  

Caption

Address ESG Factors

Impact

If enacted, the bill would significantly change the way state agencies and pension funds make investment and employment decisions. By explicitly prohibiting the consideration of ESG factors, the bill aims to ensure that financial returns remain the primary focus of state-managed investments. This could limit the ability of these funds to engage in socially responsible or sustainable investing, which may raise concerns among advocates for environmental and social justice about the implications for corporate behavior and accountability.

Summary

Senate Bill 737, also known as the Address ESG Factors bill, is primarily aimed at prohibiting the use of Environmental, Social, and Governance (ESG) criteria by state agencies and pension fund fiduciaries in North Carolina. The bill seeks to amend existing state law to ensure that decisions regarding employment or investment are made solely based on financial metrics and economic risks rather than social or environmental concerns. This legislative move reflects a growing trend among various states to limit the influence of ESG factors in government-related investments and employment practices.

Sentiment

The sentiment surrounding SB 737 appears to be polarizing. Proponents argue that the bill is a necessary measure to protect taxpayers and state funds from being influenced by potential political or social agendas that do not align with the financial interests of the fund beneficiaries. On the other hand, opponents express concern that this legislation undermines the growing acknowledgment of corporate responsibility towards social and environmental issues and may harm the state's long-term investment strategy by neglecting factors that could affect financial performance.

Contention

Key points of contention include debates over the implications of prioritizing financial return over ESG factors and whether this will lead to a more stable or effective investment approach. Some critics highlight that disregarding ESG considerations may pose economic risks in the long run, particularly as consumer preferences shift towards companies demonstrating social responsibility. There is also a concern that the bill may conflict with emerging investment trends and societal expectations for corporations to engage in sustainable practices.

Companion Bills

No companion bills found.

Previously Filed As

NC H750

Address ESG Factors

NC SB151

State Investments and Public Contracts; to prohibit State Treasurer and Board of Control of RSA and TRSA from using ESG factors in investment decisions; may consider pecuniary factors; to prohibit state entities from considering ESG factors when awarding public contracts

NC SB815

Creates new provisions restricting corporate and public entities from making financial decisions that are not based on pecuniary factors

NC H784

Financial Institutions/ESG Factors

NC H506

2025 State Investment Modernization Act.-AB

NC SB2849

PERS; clarify fiduciary duty to invest for highest return and not based on environmental, social and governance (ESG) factors.

NC S709

2025 State Investment Modernization Act.-AB

NC HB1170

Public finance; Public Finance Protection Act; terms; standard of care; nonpecuniary factors; vote; authority; proxy votes; Attorney General; immunity; indemnification; severability; codification; effective date; emergency.

NC SB5

Requires fiduciaries for public retirement systems to make investment decisions based solely on financial factors. (8/1/24) (OR SEE ACTUARIAL NOTE APV)

NC HB2777

Public finance; Oklahoma Public Finance Protection Act; terms; standard of care; non-pecuniary factors; authority; shares; Attorney General; codification; effective date.

Similar Bills

No similar bills found.