H 750: North Carolina Prohibits Consideration of ESG Factors for State Contracts and Investments

June 27, 2023

Summary

H 750 was enacted in June 2023 and prohibits a state agency, political subdivision, or committee of the state from using or participating in the creation of ESG criteria or Economically Targeted Investments (ETI) requirements related to hiring, firing, or evaluating employees or in consideration of awarding state contracts. The law also requires only the consideration of pecuniary factors in the evaluation of an investment. The Governor initially vetoed the bill, but the state House and Senate overrode the veto.

ESG criteria and ETI requirements are defined as a set of standards to screen potential investments based on environmental and social community impacts. A pecuniary factor is defined as "a factor that has a material effect on the financial risk or financial return of an
investment based on appropriate investment horizons consistent with the purpose of the fund, if established."

 

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