HB 2100: Kansas Prohibits ESG Considerations in State Contracts and Pension Investments
Summary
HB 2100 became law in April 2023 and was effective on July 1, 2023. It prohibits any state agency from giving preferential or discriminatory treatment when procuring or letting contracts based on any environmental, social and governance criteria. It also requires investment managers for the Kansas public employees retirement system to discharge duties solely in the financial interest of participants for investments and proxy voting. The law was enacted without the Governor's signature.
"Financial" is defined to mean having "a material effect on the financial risk or the financial return of an investment" and does not include action taken or factors considered "with any purpose whatsoever to further social, political or ideological interests. "The law defines environmental, social and governance as "any criterion that gives preferential treatment or discriminates based on whether a company meets or fails to meet" certain criteria or does business with companies that meet or fail to meet such criteria. The specific criteria listed in the law include engaging in the fossil fuel-based energy, nuclear energy, other natural resource, agricultural, lumber, or mining industries; emitting greenhouse gas (GHG) emissions or failing to disclose or offset emissions; engaging in the firearms industry; failing to meet corporate governance criteria involving boards or other officers; or facilitating or failing to facilitate abortions or gender reassignment service
