Massachusetts

Title

Key Dates

Nature of
Action

ESG Category

Summary

PRIM Board Approves Plan

Adopted and in effect
2/28/2022

IPS Revisions

Promote ESG Factors in Investment and/or Proxy Voting Decisions

■ Applies to the Pension Reserves Investment Management (PRIM) Board.

■ Creates an ESG committee comprising industry experts to promote ESG labor, diversity, and environmental goals while maintaining and increasing returns.

■ Related Note: Effective March 1, 2022, the PRIM Board's Custom Proxy Voting Guidelines require the PRIM Board to vote against any director at a company that is not aligned with the Paris Climate Agreement and Climate Action 100+.

Title

Key Dates

Nature of
Action

ESG Category

Summary

  Introduced
5/12/2025

■ Establishes the Economic and Workforce Transition Fund, which shall: (i) support communities and workers impacted by the retirement of fossil fuel assets; and (ii) finance retraining programs and workforce development for jobs in clean energy and sustainable sectors. The fund shall be administered by the state treasurer.

■ The fund shall be credited with: (i) revenue from appropriations or other money authorized by the general court and specifically designated to be credited to the fund; (ii) interest earned on money in the fund; and (iii) a 1 per cent of the pension reserves investment management board’s returns from climate-aligned investments as determined by the reasonably anticipated cost of such activities. Amounts credited to the fund shall not be subject to further appropriation and any money remaining in the fund at the end of a fiscal year shall not revert to the General Fund.

  Introduced
5/12/2025

■ Establishes the Pension Innovation Fund, which shall: (i) provide economic and workforce support for communities and workers impacted by energy transition; (ii) enable fiduciaries to incorporate climate-aware investment strategies through financial assistance, technical expertise and risk assessment tools; (iii) facilitate the transition of public pension funds toward climate-aligned, risk-resilient investment strategies that promote long-term financial security, intergenerational equity and systemic resilience; (iv) support and provide a structured, legally protected pathway for pension funds to divest from high-risk assets and allocated toward sustainable investments; (v) establish fiduciary safe harbor protections to empower pension fund managers to proactively manage climate risks without fear of undue legal liability; (vi) support economic and workforce transition initiatives to protect workers and communities affected by industry shifts; and (vii) enhance transparency and accountability through standardized reporting and public oversight mechanisms. The fund shall be administered by the state treasurer.

■ Requires the Pension Reserves Investment Trust or the Pension Reserves Investment Management Board (the “public fund”) to identify all ammunition, firearm or firearm accessory manufacturing or retailing companies in which the public fund owns direct or indirect holdings and file this list with the attorney general.

■ Prohibits the public fund from investing in any ammunition, firearm or firearm accessory manufacturing or retailing companies and requires the public fund to sell, redeem, divest, or withdraw all publicly-traded securities of each company identified. Does not apply to actively-managed investment funds as long as the public fund requests that managers of these investment funds remove identified companies from the investment fund or create a similar actively-managed fund that does not invest in identified companies.

■ Establishes a Climate Risk Investment Review Committee within the Office of the Treasurer that shall: (i) study and review on a continuing basis the risk associated with all investments made by the pension board in any climate risk investments; and (ii) assess the readiness of the public fund for the purposes of implementing the sale, redemption, divestment or withdrawal of climate investments. The committee shall, in accordance with sound investment criteria and consistent with the committee's fiduciary obligations, take into account that climate risk investments have financial risks to pension beneficiaries and the commonwealth’s taxpayers. The committee shall provide recommendations and a series of decisions to mitigate those risks through an active decarbonization of the pension portfolio. The committee shall report on efforts to conduct Climate Transition Planning or efforts to encourage climate aware strategic plans and business models.

H4819: An Act to mandate the review of climate risk in order to protect public pension beneficiaries and taxpayers

Introduced
7/8/2024

Legislation

Promote Divestment from Certain Industries

■ Requires the office of the treasurer to form a Climate Risk Investment Review Committee, which will develop a plan to sell, redeem, divest, or withdraw from climate risk investments within 180 days of the effective date and annually thereafter. The committee's report will direct the board's actions.

■ Prohibits the PRIM Board from approving or ratifying any fossil fuel investments or any climate risk investments.

■ Requires the Public Fund, within 90 days of enactment, to identify, and within 30 days, to report, all climate risk investments in which the fund owns direct or indirect holdings. Requires divestment from listed companies by January 1, 2026.

■ Does not apply to indirect holdings in actively managed investment funds.

SUBSEQUENT DEVELOPMENTS

■ On 7/8/2024, H4819 was introduced, which is a new draft of H2504 (the version of the bill introduced in 2023).  H4819 has been referred to the House Committee on Ways and Means.

■ Similar legislation introduced, but did not pass, in 2022 (H4170) and 2023 (H2504).

Title

Key Dates

Nature of
Action

ESG Category

Summary

H4819: An Act to mandate the review of climate risk in order to protect public pension beneficiaries and taxpayers

Introduced but failed to pass in 2024 legislative session

Legislation

Promote Divestment from Certain Industries

■ Requires the office of the treasurer to form a Climate Risk Investment Review Committee, which will develop a plan to sell, redeem, divest, or withdraw from climate risk investments within 180 days of the effective date and annually thereafter. The committee's report will direct the board's actions.

■ Prohibits the PRIM Board from approving or ratifying any fossil fuel investments or any climate risk investments.

■ Requires the Public Fund, within 90 days of enactment, to identify, and within 30 days, to report, all climate risk investments in which the fund owns direct or indirect holdings. Requires divestment from listed companies by January 1, 2026.

■ Does not apply to indirect holdings in actively managed investment funds.

SUBSEQUENT DEVELOPMENTS

■ On 7/8/2024, H4819 was introduced, which is a new draft of H2504 (the version of the bill introduced in 2023).  H4819 has been referred to the House Committee on Ways and Means.

■ Similar legislation introduced, but did not pass, in 2022 (H4170) and 2023 (H2504).

H2515: An Act Relative to Authorizing Independent Retirement Systems to Divest from Fossil Fuel Companies.

■ Authorizes independent retirement systems (which includes, any Massachusetts public pension system under the oversight, monitoring, and regulation of the public employee retirement administration commission) to divest in whole or in part from any investment in fossil fuel companies. Furthermore, the board of an independent retirement system may invest in index funds or other investment vehicles that may not include fossil fuel companies. The legislation would take effect upon passage.

SUBSEQUENT DEVELOPMENTS

■ On 3/18/2024, the bill was reported favorably by committee and referred to the committee on House Ways and Means

■ Similar legislation introduced, but did not pass, in 2022 (H2640).

H2434: An Act relative to the responsible corporate investments act

Introduced but failed to pass in 2024 legislative session

Legislation

Promote Divestment from Certain Industries

■ Prohibits the state employees retirement system, teachers retirement system, and county, city, and town contribution retirement systems from investing in an investment vehicle or fund controlled by a financial institution headquartered in a state in which there is legislative or executive action prohibiting that state's treasurer, retirement system, or public pension fund from investing with a financial institution or investment company that utilizes ESG factors.

S1723: Authorizing Independent Retirement Boards to Divest from Fossil Fuel Companies

■ Authorizes independent retirement systems to,  in accordance with the procurement process under section 23B of chapter 32 of the General Laws, divest in whole or in part from any investment in fossil fuel companies, the assets of which remain under the direct control and management of the independent retirement system and are not separately managed or invested by the Pension Reserves Investment Management Board.

■ Independent retirement system"" means any Massachusetts public pension system under the oversight, monitoring, and regulation of the public employee retirement administration commission, except the state employees retirement system, the state teachers' retirement system, and the State-Boston retirement system in so far as the assets attributable to teachers who are members of that system.

SB1644: Relates to pensions, fiduciary standards, and sustainable investment.

Introduced but failed to pass in 2024 legislative session

Legislation

Affirmatively Not Restricting ESG

■ Expands the fiduciary duty standard by explicitly stating how it encompasses management of the state's public pensions as a public good through (i) financial performance and (ii) the protection of future social and environmental benefits. Also notes how fiduciary-grade investments must meet the goals of diversification, risk mitigation for current and future retirees, and stewardship strategies that minimize the risk of large financial and environmental losses.

H2503: An Act requiring public pension fund divestment from ammunition and firearms

Introduced but failed to pass in 2024 legislative session

Legislation

Promote Divestment from Certain Industries

■ Requires the Public Fund (Pension Reserves Investment Trust (PRIT) and the PRIM Board), within 30 days of enactment, to identify and report all ammunition, firearm, or firearm accessory manufacturing or retailing companies in which the fund owns direct or indirect holdings. Requires divestment from listed companies within 12 months of enactment.

SUBSEQUENT DEVELOPMENTS

■ On 4/4/2024, the bill was accompanied by a study order (see H.4518).  

■ Similar legislation introduced, but did not pass, in 2022 (H43).

HB2480/S1651: An Act Relative to the Divestment of State Pension Funds from Nuclear Weapons

Introduced but failed to pass in 2024 legislative session

Legislation

Promote Divestment from Certain Industries

■ Requires PRIT and the PRIM Board not to invest in any nuclear weapon producer. Requires the public fund to sell, redeem, divest, or withdraw all publicly traded and non-publicly traded securities of each company identified within 12 months of enactment.

■ Does not apply to indirect holdings in actively managed investment funds or any conflicting statutory/legal obligation.

H2591/S1690: An Act Requiring Public Pension Fund Divestment from Ammunition and Firearms

Introduced but failed to pass in 2024 legislative session

Legislation

Promote Divestment from Certain Industries

■ Requires PRIT and the PRIM Board within 90 days of enactment to make its best efforts to facilitate the identification of all ammunition, firearm or firearm accessory manufacturing or retailing companies ("scrutinized companies") in which PRIT has direct or indirect holdings and to maintain a scrutinized companies list. Requires PRIT and the PRIM Board not to invest in any ammunition, firearm, or firearm accessory manufacturing or retailing companies. Requires the public funds to sell, redeem, divest, or withdraw all publicly traded securities of each company identified within 12 months after the company’s most recent appearance on the scrutinized companies list.

■ Does not apply to indirect holdings in actively managed investment funds.