Public Act 103-0324
HB2782 EnrolledLRB103 30690 DTM 57161 b

    AN ACT concerning finance.
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
    Section 5. The Illinois Sustainable Investing Act is
amended by changing Sections 10 and 20 as follows:
    (30 ILCS 238/10)
    Sec. 10. Definitions. As used in this Act:
    "Financial institution" means a bank, savings bank, or
credit union established under the laws of the State of
Illinois, another state, or the United States of America.
    "Governmental unit" has the same meaning as in the Local
Government Debt Reform Act.
    "Investment manager" means:
        (1) a fiduciary selected by a public agency, pension
    fund, retirement system or governmental unit who has the
    power to manage, acquire, or dispose of any asset of a
    public agency, pension fund, retirement system or
    governmental unit;
        (2) has acknowledged in writing that he or she is a
    fiduciary with respect to the public fund, retirement
    system or pension fund; and
        (3) is at least one of the following: (i) registered
    as an investment adviser under the federal Investment
    Advisers Act of 1940; (ii) registered as an investment
    adviser under the Illinois Securities Law of 1953; (iii) a
    bank, as defined in the Investment Advisers Act of 1940;
    or (iv) an insurance company authorized to transact
    business in this State.
    "Investment policy" means a written investment policy
adopted by a public agency or governmental unit which
addresses safety of principal, liquidity of funds, and return
on investment and which requires the investment portfolio be
structured in such a manner as to provide sufficient liquidity
to pay obligations as they come due.
    "Public agency" means the State of Illinois, the various
counties, townships, cities, towns, villages, school
districts, educational service regions, special road
districts, public water supply districts, fire protection
districts, drainage districts, levee districts, sewer
districts, housing authorities, the Illinois Bank Examiners'
Education Foundation, the Chicago Park District, and all other
political corporations or subdivisions of the State of
Illinois, now or hereafter created, whether herein
specifically mentioned or not.
    "Public funds" means current operating funds, special
funds, interest and sinking funds, and funds of any kind or
character belonging to or in the custody of any public agency.
    "Sustainability factors" means factors that may have a
material and relevant financial impact on the safety or
performance of an investment and which are complementary to
financial factors and financial accounting.
(Source: P.A. 101-473, eff. 1-1-20.)
    (30 ILCS 238/20)
    Sec. 20. Consideration of sustainable investment factors
in decision-making.
    (a) 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.
    (b) Sustainability factors may include, but are not
limited to, the following:
        (1) Corporate governance and leadership factors, such
    as the independence of boards and auditors, the expertise
    and competence of corporate boards and executives,
    systemic risk management practices, executive compensation
    structures, transparency and reporting, leadership
    diversity, regulatory and legal compliance, shareholder
    rights, and ethical conduct.
        (2) Environmental factors that may have an adverse or
    positive financial impact on investment performance, such
    as greenhouse gas emissions, air quality, energy
    management, water and wastewater management, waste and
    hazardous materials management, and ecological impacts.
        (3) Social capital factors that impact relationships
    with key outside parties, such as customers, local
    communities, the public, and the government, which may
    impact investment performance. Social capital factors
    include human rights, customer welfare, customer privacy,
    data security, access and affordability, selling practices
    and product labeling, community reinvestment, and
    community relations.
        (4) 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.
        (5) Business model and innovation factors that reflect
    an ability to plan and forecast opportunities and risks,
    and whether a company can create long-term shareholder
    value, including factors such as supply chain management,
    materials sourcing and efficiency, business model
    resilience, product design and life cycle management, and
    physical impacts of climate change.
    (c) Sustainability factors may be analyzed in a variety of
ways, including, but not limited to: (1) direct financial
impacts and risks; (2) legal, regulatory, and policy impacts
and risks; (3) against industry norms, best practices, and
competitive drivers; and (4) stakeholder engagement.
    (d) Nothing in this 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. This Act shall not apply to financial
institution time deposits or financial institution processing
    (e) Beginning January 1, 2024, investment managers shall
disclose, prior to the award of a contract, a description of
any process through which the manager prudently integrates the
sustainability factors described in subsection (b) into their
investment decision-making, investment analysis, portfolio
construction, due diligence, and investment ownership in order
to maximize anticipated risk-adjusted financial returns,
identify projected risk, and execute the manager's fiduciary
duties. Investment managers shall provide this disclosure to
each public agency, pension fund, retirement system, or
governmental unit for whom the investment manager is seeking
selection as a fiduciary before acting in this official
(Source: P.A. 101-473, eff. 1-1-20.)