North Carolina Senate Bill S737

North Carolina 2023-2024 Regular Session

• 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
• Refer: 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.