New Jersey

Title

Key Dates

Nature of
Action

ESG Category

Summary

■Establishes DEI department

■Specifies Functions, Powers, and Duties of Department.

■Grants department rulemaking authority

■Committee will have an affirmative duty to create a statewide initiative to promote DEI

■ Prohibits the investment of New Jersey public employee retirement funds in any business, country, country's instrumentality, or business affiliate that avoids its Superfund obligations to the State.

■Prohibits the investment of any pension or annuity fund asset under the jurisdiction of the Division of Investment in the Department of the Treasury in any business, country, country's instrumentality, or business affiliate, if that business has been identified as a responsible party by the United States Environmental Protection Agency, in accordance with the federal  Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for a Superfund site in the State, and if that business, country or country's instrumentality filed for bankruptcy rendering it incapable of complying with its obligations with respect to a Superfund site in the State for which it has been identified as a responsible party.  This prohibition applies if the bankruptcy filing is in direct anticipation of or in direct response to a finding of responsibility by the United States Environmental Protection Agency in accordance with CERCLA for a Superfund site in the State.

■Requires that divestment occur within three years of the bill's effective date or within three years of an initial identification of a business, country, or country's instrumentality that it is in violation of the bill.  The bill requires the director to notify the business, country, or country's instrumentality that it is in violation of the bill, and to inform the business of the appeal process, prior to taking any action to divest prohibited investments.

■ Requires the director to file a report with the Legislature of all investments held in violation of the bill within 180 days of the bill's effective date.  Every year thereafter, the director is required to report on all investments divested in accordance with the bill.

■ Requires the State to indemnify and hold harmless members and employees of the State Investment Council from all claims, liability, losses, and damages that council members, and State officers and employees, may sustain because of a decision to divest investments prohibited by the bill.

S198: Prohibiting Investment of State Pension Funds in 200 Largest Publicly Traded Fossil Fuel Companies

Introduced 1/9/2024

Legislation

Promote Divestment from Certain Industries

■ Applies to pension and annuity funds, including the New Jersey Public Employees' Retirement System and the Teachers' Pension & Annuity Fund.

■ Prohibits the Director of the Division of Investment from investing any assets of the State retirement funds in any of the 200 largest publicly-traded fossil fuel companies as determined by the carbon content in their reserves. Requires divestment from coal companies to be completed within 24 months, and from all other fossil fuel companies, within 12 months after the effective date of the statute.

■ The director would be authorized to cease divestment or reinvest in previously divested companies if the director demonstrates that, as a direct result of the divestment, the State retirement funds have or will become equal to or less than 99.5 percent of their hypothetical value had no divestment occurred.  Finally, the bill would require the State Investment Council and the director to report on the divestment efforts required by the bill within 120 days of the bill's effective date, and annually thereafter.

■ Originally introduced in 2022 as “A1733/S416: Prohibiting Investment of State Pension Funds in 200 Largest Publicly Traded Fossil Fuel Companies” but failed to pass during that legislative session. Carried over to 2024 legislative session.

S1115: Prohibiting Investment of State Pension Funds in Companies Manufacturing Assault Firearms for Civilian Use

Introduced 1/09/2024

Legislation

Promote Divestment from Certain Industries

■ Applies to the New Jersey Public Employees' Retirement System and the Teachers' Pension & Annuity Fund.

■ Prohibits investment in companies that manufacture, import, or sell assault firearms for civilian use. Requires divestment within three years of the effective date.

■ Originally introduced in 2022 as “A1752/S1407: Prohibiting Investment of State Pension Funds in Companies Manufacturing Assault Firearms for Civilian Use” but failed to pass during that legislative session. Carried over to 2024 legislative session.

S1595: Prohibiting Investment in Nuclear Weapons

Introduced 1/09/2024

Legislation

Promote Divestment from Certain Industries

■ Prohibits investment by State of pension and annuity funds in, and requires divestment from, companies involved in production or maintenance of nuclear weapons.

■ Previously A4232/S2701 in the 2023 - 2024 legislative session.

Title

Key Dates

Nature of
Action

ESG Category

Summary

 ■ The bill provides for the Division of Investment, in conjunction with the State Investment Council, to develop a plan to assess and identify the ESG risk and exposure characteristics of managed investment portfolios.  This provision is in response to the United States Department of Labor’s 2015 guidance on economically targeted investments in retirement plans covered by the Employee Retirement Income Security Act (ERISA). The plan shall include a minimum of three subscription options for an ESG ratings resource that will provide the division with access to ESG information and data to assess the managed investment portfolios.

■ Within 90 days of receiving the plan from the division, the State Investment Council shall vote to approve the plan, with or without amendments in the council’s discretion, including the budgeted acquisition of a resource as selected by the division.  Upon approval of the plan, the division shall prepare and submit to the State Investment Council an ESG assessment analysis to accompany each prospective investment.  The analysis shall detail ESG and other risk factors of the investment in addition to risks to the managed investment portfolios.  The investment policy sub-committee of the council, or its successor, shall consider the analysis prior to the council’s consideration of the analysis.