Minnesota Senate Bill SF940

Minnesota 2023-2024 Regular Session

• Introduced: 1/30/23
• Refer: 1/30/23

Caption

The Stop Environmental Social Governance (ESG) and Social Credit Score Discrimination Act

Impact

The bill is poised to significantly affect state investment rules by restricting where public funds can be allocated, particularly against companies perceived to engage in behaviors that undermine traditional industries such as mining and agriculture. By mandating divestment from certain sectors, SF940 aims to centralize control over state investments and ensure alignment with state economic priorities. The implications extend to state contracts as all vendors working with the government must certify their non-engagement in boycotting practices, potentially limiting the pool of eligible contractors.

Summary

SF940, known as the Stop Environmental Social Governance (ESG) and Social Credit Score Discrimination Act, aims to prohibit the State Board of Investment from investing in companies that engage in boycotts related to mining, energy production, production agriculture, or commercial lumber production. Furthermore, the bill mandates the divestment from such companies and prohibits state entities from entering into contracts with businesses that engage in these boycotts. The legislation enforces civil penalties for non-compliance, highlighting the state's push against perceived discriminatory practices in the financial sector linked to environmental, social, and governance (ESG) criteria.

Contention

Supporters of SF940 argue that the bill is necessary to protect Minnesota's economic interests and to prevent companies from leveraging ESG criteria to boycott critical industries. They believe that such boycotts harm local economies and threaten job security in essential sectors. Conversely, critics contend that the bill infringes on the rights of businesses to make ethical decisions based on environmental stewardship and social responsibility. Concerns have been raised about potential legal ramifications and the challenges that may arise regarding the vague definitions of boycotts and discrimination outlined in the bill.