Earlier this week, Ropes & Gray published a whitepaper focusing on the current status of state pro- and anti-ESG regulation. The whitepaper is intended to be a companion piece to our award-winning Navigating State Regulation of ESG website.
While the website offers detailed and comprehensive summaries of each individual ESG law, rule or development in all 50 states, the whitepaper is meant to provide both an overview of the national pro- and anti-ESG dynamics playing out in the pension universe and executive summaries of the overall investment climate in each state.
Following the launch of the whitepaper, we are also launching a series of posts highlighting individual states. To start the series, we are focusing on Florida.
Current status of ESG investing for Florida state pension plans
- After months of public officials calling for stronger anti-ESG policies, Florida approved HB-3 on May 2, 2023, which limits the consideration of ESG factors in the investment decisions of state retirement systems. HB-3 is one of the most restrictive and comprehensive anti-ESG laws adopted to date, imposing significant new compliance obligations that are distinct from those required by ERISA and other state laws. For additional details, please see our alert here.
- On December 1, 2022, the Treasurer announced that Florida would divest $2 billion of state funds from a major asset manager due to the manager’s stance on ESG issues. Additionally, the Governor and the Trustees of the State Board of Administration (SBA)—the entity that manages the assets of the Florida Retirement System Trust Fund and administers the Florida Retirement System Investment Plan—passed a resolution to revise the SBA’s investment policy statement to require any evaluation of an SBA investment decision to be based only on “pecuniary factors.” HB-3 later codified this policy into law.
- Florida has also been an active participant in the various red state anti-ESG coalitions, including leading a 19-state coalition in a joint governors’ policy statement that commits to “protecting taxpayers from ESG influences across state systems.”
For further insights or information on what is happening on the ground in Florida or other states, please reach out to me or any other member of the Ropes & Gray state ESG team.
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