On August 23, 2019, Illinois Governor Pritzker signed into law the Illinois Sustainable Investing Act “Act” (P.A. 101-0473). The law states that any public agency or governmental unit “should develop, publish, and implement sustainable investment policies applicable to the management of all public funds under its control.” Sustainable investment policy may be incorporated into existing investment policies.
Governmental units, as defined by the Act, mimic the definition in the Local Government Debt Reform Act (30 ILCS 350/3). Governmental units include, but are not limited to counties, townships, municipalities, municipal corporations, school districts, other districts (parks, sanitary, fire protection, and conservation), and entities created by intergovernmental agreements.
Sustainability factors to consider when implementing new investment policies include, but are not limited to:
- Corporate governance and leadership factors;
- Environmental factors;
- Social capital factors;
- Human capital factors; and
- Business model and innovation factors.
The Act also amends the Illinois Pension Code (40 ILCS 5/1-113.17) that states retirement systems, pension funds, or investment boards subject to the Code “shall adopt a written investment policy and file a copy of that policy with the Department of Insurance within 30 days after its adoption.” The investment policy must include material relevant to sustainability factors considered by the board.
The Illinois State Treasurer’s Office published a webpage that explains the Sustainable Investment Act and offers useful third-party resources to consider when drafting sustainability factors.
