HB 2460

Abstract

Creates the Illinois Sustainable Investing Act. Provides that any public agency or governmental unit shall develop, publish, and implement sustainable investment policies applicable to the management of all public funds under its control. Provides that the sustainable investment policy may be incorporated in existing investment policies developed, published, and implemented by a public agency or governmental unit. Provides that the sustainable investment policy shall include material, relevant, and decision-useful sustainability factors to be applied by the public agency or governmental unit in evaluating investment decisions. Provides that a public agency shall prudently integrate sustainability factors into its investment decision-making, investment analysis, portfolio construction, due diligence, and investment ownership in order to maximize anticipated financial returns, minimize projected risk, and more effectively execute its fiduciary duty. Specifies sustainability factors, and the ways in which such factors may be analyzed. Amends the Deposit of State Moneys Act, the Public Funds Investment Act, and the Illinois Pension Code to make changes concerning investment policy and the Illinois Sustainable Investing Act. Provides findings and purpose provisions. Defines terms. State Mandates Fiscal Note (Dept. of Commerce & Economic Opportunity) This bill does not create a State mandate. Fiscal Note (Office of the Treasurer) HB 2460 will have no fiscal impact on the State Treasurer's Office as the Treasurer's office already has a published investment policy that includes material, relevant and decision-useful sustainability factors in accordance with this legislation. HB 2460 is likely to have a positive economic impact to the State of Illinois because evaluating sustainability factors in investment decision-making minimizes risks and maximizes returns on the state's investments. House Floor Amendment No. 1 Provides that the sustainable investment policy developed under the Illinois Sustainable Investing Act shall include material, relevant, and decision-useful sustainability factors to be considered (currently, applied) by the public agency or governmental unit as one component of its overall evaluation of investment decisions. Provides that nothing in the Act prohibits a public agency or governmental unit from integrating additional factors into its investment decision-making, investment analysis, portfolio construction, due diligence, and investment ownership of public funds. Provides that the Act shall not apply to bank time deposits or bank processing services. Makes conforming changes. House Floor Amendment No. 2 Provides that sustainability factors include, among other factors, human capital factors that recognize that the workforce is an important asset to delivering long-term value, including factors such as labor practices, responsible contractor and responsible bidder policies, employee health and safety, employee engagement, diversity and inclusion, and incentives and compensation (currently, responsible contractor and responsible bidder policies are not included as human capital factors). Senate Committee Amendment No. 1 Provides that any public agency or governmental unit should (currently, shall) develop, publish, and implement sustainable investment policies applicable to the management of all public funds under its control. Provides that the sustainable investment policy should (currently, shall) include material, relevant, and decision-useful sustainability factors to be considered by the public agency or governmental unit as one component of its overall evaluation of investment decisions, which may (currently, shall) include specified items. Makes other changes concerning specified investment policies. Defines "financial institution". Makes conforming changes.