HB 228: Montana Prohibits Nonpecuniary ESG Considerations in State Investments
Summary
HB 228 was enacted in April 2023 and requires the board of investments to consider only pecuniary factors in evaluations. It also requires that all shares must be voted solely in the pecuniary interests of beneficiaries.
The law defines a pecuniary factor 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 plan's investment objectives and funding policy." Nonpecuniary under the law includes "any action taken or factor considered by a fiduciary with any purpose to further environmental, social, governance, or other similarly oriented considerations." It provides that ESG factors may be considered pecuniary interests "only if they present economic risks or opportunities that qualified investment professionals would treat as material economic considerations under generally accepted investment theories."
