Disclosure of ESG investing strategy for Illinois public funds ready for
governor’s desk
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[May 26, 2023]
By Greg Bishop | The Center Square
(The Center Square) – Investment managers of Illinois public funds,
including pension systems, must disclose how they integrate
environmental, social and governance investment strategies with a bill
queued for the governor’s desk.
House Bill 2782 is an initiative of Illinois State Treasurer Michael
Frerichs. State Sen. Ram Villivalam, D-Chicago, explained what the
measure requires.
“It amends the Sustainable Investing Act to require investment managers
prior to their selection as a fiduciary to a public body or a public
pension system to disclose to that body or system how they integrate
sustainability factors into their investment decision making,”
Villivalam said.
The list of various considerations include corporate governance and
leadership.
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“Which also means transparency in reporting, shareholder rights, ethical
conduct, yes it includes environmental factors,” among others,
Villivalam said.
State Sen. Jason Plummer, R-Edwardsville, took issue with the proposal
and said there’s no data to suggest investing with the focus on ESG
increases fund performance.
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Illinois state Sen. Ram Villivalam,
D-Chicago
Greg Bishop / The Center Square
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“The data shows that long term, companies that focus on these policies
and investment managers that put these policies ahead of traditional
investment philosophies generate a lower return over the medium and long
term for their investors,” Plummer said.
Plummer characterized such investment strategies as trendy and not good
for taxpayers or pensioners.
“Long term, this hurts the people of Illinois, it hurts our pensioners
and it guarantees that our investments will continue to underperform the
pension systems of many other states,” Plummer said.
The measure passed along party lines and can now be sent to the
governor’s desk.
Greg Bishop reports on Illinois government and other
issues for The Center Square. Bishop has years of award-winning
broadcast experience and hosts the WMAY Morning Newsfeed out of
Springfield. |