Legislation/Guidance in Effect
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Title |
Key Dates |
Nature of |
ESG Category |
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Effective Date 7/1/2024 Adopted Introduced |
Legislation | Promote ESG Factors in Investment and/or Proxy Voting Decisions |
■ Requires that the Executive Director of the State Retirement Agency shall employ a Director of Diversity, Equity, and Inclusion of the State Retirement and Pension System (DEI Director) and establishes a new governance program within the Investment Decision. ■ The DEI Director shall, among other things, engage with the Board of Trustees to promote and support diversity of participation and leadership, provide assistance as necessary to the Investment Division, and provide advice and reports to the Board of Trustees on topics including diversity, equity and inclusion. ■ The individual appointed by the Chief Investment Officer (CIO) to implement the governance program will be responsible for, among other things, monitoring, evaluating, and quantifying the risks and effects of material ESG factors on the investment of the assets of the Several Systems, working across asset classes to integrate consideration of material ESG factors into investment due diligence and recommendations, and providing recommendations to the CIO based on research and analysis of material ESG factors, including diversity, equity, and inclusion. |
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HB740/SB566: State Retirement and Pension System—Investment Climate Risk—Fiduciary Duties |
Effective date |
Legislation |
Promote ESG Factors in Investment and/or Proxy Voting Decisions |
■ Applies to the Maryland State Retirement and Pension System. SUBSEQUENT DEVELOPMENTS Updated Investment Manual (February 2023) In managing the assets of the System, consideration of all value drivers and material risks and mitigation strategies should be given to enhance returns and optimize performance. The integration of material Environmental, Social, and Governance (ESG) factors into this assessment can provide an additional layer of decision-useful information and can be beneficial to investment analysis and decision making when considering potential opportunities and/or risks to the portfolio. Where ESG factors are material to the risk-return analysis of an investment or an investment course of action, such factors are appropriately classified as material risks and assessed in conjunction with other relevant economic factors. Such ESG factors are inclusive of but not limited to the following: • Environment: Climate Change/Climate Risk, Energy Efficiency, Tidal Risk/Tidal Energy • Social: Diversity/Equity/Inclusion (DEI), Human Rights, Labor Standards, Community Relations • Governance: Board Composition, Political Contributions, Executive Compensation, Conflicts of Inters |
