Missouri

Title

Key Dates

Nature of
Action

ESG Category

Summary

■ In a special meeting called at the urging of Governor Mike Parson, the 11-member Missouri State Employees’ Retirement System (MOSERS) Board of Trustees voted in favor of a motion by state Treasurer (and MOSERS Board member) Vivek Malek to divest the pension fund’s investments in China. Treasurer Malek’s motion stipulated that the MOSERS staff shall divest from all Global Public Equity investments in China within 12 months of the motion’s approval, with limited extensions permitted in order to (i) avoid aggregate transaction costs in excess of $500,000, (ii) avoid selling Global Public Equity interests at a loss on the secondary markets, or (iii) otherwise comply with legal requirements.

HR12: Urges Missouri to oppose federal rules or regulations requiring companies to disclose climate change risk

Adopted and in effect
5/12/2023

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Urges the state of Missouri to exercise all of its authority to prevent a forced imposition of ESG policies denying access to financial services to citizens and lawful businesses and to join together with other states sharing this commitment. Urges the governor and all executive officers to exercise all discretion to ensure that the federal government, domestic or international organizations or agreements, or other entities coercing environmental or other ESG policies do not impose costs and consequences on the citizens of Missouri, do not deprive citizens of their constitutional freedoms and the guarantees of due process of law and equal treatment under the law, and do not infringe on the sovereignty of Missouri. Urges state officials to oppose forthcoming SEC regulations, the implementation of the Executive Order on Climate-Related Financial Risk, and any other top-down, one-size-fits-all environmental mandate. Urges Missouri state agencies to not base any action or decision upon the assumption that a transition to "net zero" is likely to occur.

SUBSEQUENT DEVELOPMENTS

■ Adopted by House on 5/12/2023

Treasurer Fitzpatrick Announces MOSERS Has Pulled $500 Million in State Pension Funds from BlackRock

Adopted and in effect
10/18/2022

Treasurer Position

Target Entities that Boycott Certain Industries

■The Missouri State Treasurer announced that the Missouri State Employees' Retirement System (MOSERS) has sold all public equities managed by BlackRock, pulling approximately $500 million in pension funds from the investment manager. According to the press release, at the MOSERS Board of Trustees meeting in June 2022, the MOSERS board directed staff to require BlackRock to abstain from voting proxies on behalf of the plan due to BlackRock's ESG-related public statements. BlackRock refused, and MOSERS proceeded with the sale of all of its equity holdings with the manager.

Introduced

11/30/2022

 ■ The State Treasurer who was elected to be the state auditor expressed his opposition to ESG investing and his goals for opposing it, stating: "“There’s going to be legislation in Missouri this coming session dealing with ESG issues and proxy voting, and things like that. So, as somebody who’s been very involved in that conversation at the board level on a pension plan, as well as having been exposed to it a lot through my engagements with the State Financial Officers Foundation, with [The Heritage Foundation], with you guys, the stuff that I’ve been able to learn, I’m going to be a part of that legislative process in helping develop that legislation,” Fitzpatrick said.

■ The incoming Missouri state auditor explained why he’s against the use of ESG policies, stating, "Essentially, the reason I am against ESG being used as a tool for investing purposes is because it prioritizes nonfinancial factors in investment decisions, and how you’re managing people’s investments, over those financial—or what we call pecuniary—factors that should be the priority when you’re managing somebody else’s money and have a responsibility to them to generate the best return possible on their investment.

Title

Key Dates

Nature of
Action

ESG Category

Summary

SB529: Establishes provisions relating to the divestment of certain restricted entities and restricted investment products in which a public employee retirement system holds an investment

■ Provides that after August 28, 2025, a state or local public retirement system shall not knowingly invest in a restricted entity or a restricted investment product, as such terms are defined in the act to include certain Chinese persons and investments and those listed on the Specially Designated Nationals and Blocked Persons List published U.S. Department of the Treasury. Before December 1, 2025, and at least annually thereafter, the board of a public employee retirement system shall identify all restricted entities and restricted investment products in which the system holds an investment. If the board determines after such review that the system has investments in a restricted entity or a restricted investment product, the board shall establish a plan to divest the investment as soon as financially prudent and the investment shall be divested no later than August 28, 2026, unless the board finds that following conditions exist in which case the investment shall be divested before August 28, 2028:

(1) The aggregate transaction costs in excess of five hundred thousand dollars;

(2) The selling of global public equity interests would result in a loss on secondary markets; or

(3) The divestment would fail to comply with federal or state law or other legal obligations.

■ The board shall determine whether to cease or defer divestment and resume investment during any period in which the entity or product has not returned to being a restricted entity or restricted investment product only if certain conditions outlined in the act are met.

■ Additionally, on or before December 31, 2025, and annually thereafter, the board shall submit a report to the General Assembly, which shall include certain information listed in the act including all publicly traded securities sold, redeemed, divested, or withdrawn in compliance with this act and all commingled funds that are exempted from divestment.

■ Does not apply to divestment of existing investments in private market funds nor to indirect holdings in actively managed investment funds. If a manager or investment fiduciary creates a similar actively managed investment fund without the restricted entities, the board shall replace all applicable investments with the investments in the similar actively managed investment fund within a period consistent with prudent investing standards.

■ Prohibits all "State-managed funds" from holding investments in any "foreign adversary" (i.e., the People's Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People's Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, the Syrian Arab Republic, or any other entity designated by the governor in consultation with the attorney general), "State-owned enterprise" of a foreign adversary, company domiciled within a foreign adversary, or a company owned or controlled by any such entity.

■ State-managed funds are further prohibited from investing or depositing public funds in any bank domiciled or principally located within a foreign adversary. Any state-managed fund in violation of this bill is required to immediately begin divestment of any public holdings, to be fully divested within two years of the effective date of the bill. Within six months after the effective date of this bill, the State Treasurer must identify companies subject to these restrictions and distribute a list of these restricted companies to each state-managed fund. Methods of gathering this information are specified in the bill.

■  Modifies provisions relating to duties of fiduciaries for public employee retirement systems. Specifically, investment fiduciaries are required to:
(1) Not consider ESG characteristics in a manner that would override fiduciary duties;
(2) Not be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other noneconomically motivated influence unless the mandates are consistent with the fiduciary's responsibility or as provided in the system's governing statutes, ordinances, charter, or documents with respect to the investment of system assets or other duties imposed by law relating to the investment, management, deposit, or custody of system assets; and
(3) Not be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds or in private assets, unless such mandates are consistent with the fiduciary's responsibility.

■  All shares of common stock held directly by a retirement system shall be voted solely in the economic interest of participants of the system. Voting shares for the purposes of furthering noneconomic environmental, social, political, ideological, or other goals is prohibited. The act creates provisions on proxy voting for such purposes.

SB338: Prohibits giving preferential treatment or discrimination based upon ESG scores

Introduced
1/8/2025

■ The act requires the State Treasurer to create a Restricted Financial Institutions List, containing the names of financial institutions that are engaged in a boycott of companies, as that phrase is defined in the act. The list is to be used by the Treasurer for the purpose of determining which financial institutions to enter into banking contracts with. The list must be updated annually and is required to be posted on the Treasurer's website and delivered to the Governor, the President Pro Tem of the Senate, and the Speaker of the House of Representatives. Following inclusion on the list, the financial institution may be removed upon demonstration to the Treasurer that it has ceased all boycotts. The act permits the Treasurer to disqualify restricted financial institutions from the competitive bidding process or from any other official selection process for any banking contract.  

■  "Boycott", means performing any of the following acts without a reasonable business purpose: (a) Refusing to deal with a company; (b) Terminating business activities with a company; or (c) Any other action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company because the company: (i) engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy, timber, mining, or agriculture; (ii) engages in the exploration, production, 17 utilization, transportation, sale, or manufacturing of fossil fuel-based energy and does not commit or pledge to meet environmental standards beyond applicable federal and 20 state law; or (iii) does business with a company that engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel-based energy;

■ This act also requires public bodies to ensure that bidders, offerors, contractors, or subcontractors, when engaged in procuring or letting contracts for any purpose, are not given preferential treatment or discriminated against based on an environmental, social and governance score, as defined in the act.

Update: This provision is similar to SB 1142 (2024), SB 1350 (2024), SB 1518 (2024), SB 50 (2023) and SB 1171 (2022).

Title

Key Dates

Nature of
Action

ESG Category

Summary

SB1113: Modifies provisions relating to fiduciary duties for investments of public employee retirement systems

Introduced, but did not pass in 2024 legislative session

■ Modifies provisions relating to fiduciary duties for investments of public employee retirement systems by specifying how fiduciaries (i) may not consider ESG characteristics in a manner that would override his or her fiduciary duties as described in this section; (ii) may not be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other non-economically motivated influence unless such mandates are consistent with the fiduciary's responsibility as provided in this section or as provided in the system's governing statutes, ordinances, charter, or documents with respect to the investment of system assets or other duties imposed by law relating to the investment, management, deposit, or custody of system assets; and (iii) may not be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds or in private assets.

■ This act is identical to SB 177 (2023), SB 316 (2023), and the introduced SB 1171 (2022) and similar to SB 50 (2023).

■ This act prohibits any public entity from discriminating or giving preferential treatment to any bidder, offeror, contractor, or subcontractor, when engaged in procuring or letting contracts for any purpose, based on an environmental, social and governance score, as defined in the act. It also prohibits any LLC or corporation from being discriminated against or given preferential treatment based on an environmental, social and governance score.

Introduced, but did not pass in 2024 legislative session 

■ Amends Chapter 409, adding one new section that covers investment disclosure

SB1397/HB2778: Creates Provisions Relating to Firearms Discrimination

Introduced, but did not pass in 2024 legislative session

SB1350: Prohibits Giving Preferential Treatment or Discrimination Based upon ESG Scores

Introduced, but did not pass in 2024 legislative session

■Provides that the board of trustees of a public retirement system and any of its fiduciaries shall discharge its duties solely in the financial interest of the participants and beneficiaries for the executive purposes of (a) providing financial benefits to participants and their beneficiaries; and (b) defraying reasonable expenses of administering the system. A fiduciary shall take into account only financial factors when discharging his or her duties with respect to a public retirement system. 

■ Unless no economically practicable alternative is available, public retirement system assets shall not be entrusted to a fiduciary unless that fiduciary has a practice of, and in writing commits to, following guidelines, when engaging with portfolio companies and voting shares or proxies, that match the board of trustees' obligation to act solely upon financial factors.

■ Unless no economically practicable alternative is available, the board of trustees or any of its fiduciaries shall not adopt a practice of following the recommendations of a proxy advisor or other service provider unless such advisor or service provider has a practice of, and in writing commits to, following proxy voting guidelines that match the board of trustees' obligation to act solely upon financial factors.

SB898: Modifies Provisions Relating to Pensions

Introduced, but did not pass in 2024 legislative session

■ This act modifies provisions relating to duties of fiduciaries for public employee retirement systems. Specifically, investment fiduciaries are required to:

(1) Not consider environmental, social, or governance characteristics in a manner that would override his or her fiduciary duties;  

(2) Not be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other noneconomically motivated influence unless the mandates are consistent with the fiduciary's responsibility or as provided in the system's governing statutes, ordinances, charter, or documents with respect to the investment of system assets or other duties imposed by law relating to the investment, management, deposit, or custody of system assets;

(3) Not be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds or in private assets; and

(4) Not be prohibited from closing records related to information in connection with investments in or financial transactions with business entities.

■ Additionally, this act provides that all shares of common stock held directly by a retirement system shall be voted solely in the economic interest of participants of the system. Voting shares for the purposes of furthering noneconomic environmental, social, political, ideological, or other goals is prohibited. The act creates provisions on proxy voting for such purposes.

Introduced, but did not pass in 2024 legislative session

■ This bill relates to executive orders issued by the President of the U.S. The bill allows the state's house of representatives to review an executive order issued by the President and not passed into law by the U.S. Congress. The state's house of representatives may refer such orders to the state AG and Governor for further review. The bill requires the AG to determine whether an order is constitutional and to decide whether to seek an exemption from the order or a ruling on its constitutionality.

Introduced, but did not pass in 2024 legislative session

■ Provides that the board of trustees of a public retirement system and any of its fiduciaries may not consider factors or take action to further social, political, or ideological interests. A fiduciary may reasonably be determined to have considered factors or taken action to further social, political, or ideological interests if they make a commitment to further eliminating, reducing, offsetting, or disclosing greenhouse gas emissions; divesting from, limiting investment in, or limiting the activities or investments of any company for failing, or not committing, to meet environmental standards or disclosures; access to abortion, sex or gender reassignment treatment, or transgender surgery; or Divesting from, limiting investment in, or limiting the activities or investments of any company that engages in, facilitates, or supports the manufacture, import, distribution, marketing or advertising, sale, or lawful use of firearms, ammunition, or components, parts, and accessories of firearms or ammunition.

■ A shares held directly or indirectly by or on behalf of the state retirement system or the participants shall be voted solely in the financial interests of the participants and their beneficiaries. Unless no economically practicable alternative is available, the board of trustees shall not grant proxy voting authority to any person who is not a part of the board of trustees unless that person has a practice of, and in writing commits to, following guidelines that match the board of trustees' obligation to act solely upon financial factors.

■ Unless no economically practicable alternative is available, public retirement system assets shall not be entrusted to a fiduciary unless that fiduciary has a practice of, and in writing commits to, following guidelines, when engaging with portfolio companies and voting shares or proxies, that match the board of trustees' obligation to act solely upon financial factors.

Introduced, but did not pass in 2024 legislative session

■ Prohibits state contracts with companies that engage in economic boycotts based on ESG criteria (other than for an ordinary business purpose). "Ordinary business purpose" refers to an action by a company that does not include any purpose to further social, political, or ideological interests. A company may reasonably be determined to have taken an action with a purpose to further social, political, or ideological interests based upon evidence indicating such a purpose including, but not limited to: (a) Branding, advertising, statements, explanations, reports, letters to clients, communications with portfolio companies, statements of principles, or commitments; or (b) Participation in, affiliation with, or status as a signatory to any coalition, initiative, joint statement of principles, or agreement.

■ The act applies only to a contract that: (1) Is between a governmental entity and a company with ten or more full-time employees; and (2) Is valued at $50,000 or more over the term of the contract that is to be paid wholly or partially from public funds of the governmental entity, provided that the provisions of this subsection shall apply separately to all companies in a multiple party contract.

HB1937: Modifies provisions related to proxy voting and fiduciary investment duties for certain public employee retirement and pension systems

Introduced, but did not pass in 2024 legislative session

■ Amends Section 105.688 to require investment fiduciaries when discharging his or her duties to: (1) not consider ESG characteristics in a manner that would override his or her fiduciary duties, (2) not be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other noneconomically motivated influence unless they are consistent with the fiduciary's responsibility or other duties imposed by law, and (3) not be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds or in private assets.                                                                                 

■ Adds new Section 105.962 requiring all shares of common stock held directly by a system to be voted solely in the economic interest of plan participants and prohibiting voting shares for the purpose of furthering noneconomic environmental, social, political, ideological, or other goals. All proxies associated with a system's directly held shares must be voted by internal system staff or by an investment manager or proxy voting service provider who has committed in writing to vote shares either pursuant to proxy voting guidelines chosen by the system or in a manner consistent with the obligation to act solely in the economic interest of plan participants.

SB815: Creates new provisions restricting corporate and public entities from making financial decisions that are not based on pecuniary factors

Introduced, but did not pass in 2024 legislative session

■ House Committee substitute bill removed the language about prohibitions on discriminating against vendors on the basis of ESG scores.  

SB827: Creates new provisions relating to social objective scoring standards

Introduced, but did not pass in 2024 legislative session

■ Current law requires the State Treasurer to prepare, maintain, and adhere to a written investment policy. This act requires such policy to include provisions prohibiting the investment of state funds in any particular investment held by any entity that prioritizes a social objective or other nonfinancial objective into its discretionary business or investment decisions.

■ The act also modifies the responsibilities of investment fiduciaries. Specifically, investment fiduciaries shall be required to: (i) not consider ESG characteristics in a manner that would override his or her fiduciary duties; (ii) not be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other non-economically motivated influence unless they are consistent with the fiduciary's responsibility or as provided in the system's governing statutes with respect to the investment of system assets or other duties imposed by law relating to the investment, management, deposit, or custody of system assets; and (iii) not be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds or in private assets.

■ All shares of common stock held directly by a retirement system shall be voted solely in the economic interest of plan participants. Voting shares for the purposes of furthering noneconomic environmental, social, political, ideological, or other goals is prohibited. The act creates provisions on proxy voting for such purposes.

HB 174: Allows the House of Representatives to review presidential orders and declare them unconstitutional

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Allows the House of Representatives to review presidential orders and declare them unconstitutional, including the regulation of the financial sector through the imposition of environmental, social, or governance standards.

HB824: New Section Relating to Investment Disclosures

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Requires investment advisers and their representatives to disclose to and receive prior written consent from a client before incorporating social or other non-financial objectives into their recommendations, solicitations, or investment selections.

HB863: Establishing requirements for municipal bonds receiving the Green Bond rating in this state

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Prohibits state agencies from publishing information, adopting laws or rules, or issuing guidelines for purposes of social credit scores or other ESG scores or metrics.

■Amends current state statute to prohibit investment fiduciaries of state systems from: (1) considering ESG characteristics in a manner that would override their fiduciary duties; (2) becoming subject to any mandate to invest according to any environmentally, socially, or other non-economically motivated influence unless otherwise consistent with their fiduciary responsibilities; and (3) becoming subject to any divestment mandate.

■Adds proxy voting rules requiring shares to be voted "solely in the economic interest of plan participants" and prohibits voting shares for the purpose of furthering non-economic ESG or other related goals.

■Establishes rules for issuing "green bonds" and requires at least 85% of the bond proceeds to be used for "eligible green projects," which means a project or activity relating to and supporting a positive environmental impact.

■Requires broker-dealers, agents, and investment advisers to provide prior written disclosure of any social or non-financial objectives that are incorporated into their advisory business.

HB769: Modifies provisions related to proxy voting and fiduciary investment duties for certain public employee retirement and pension systems

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Requires an investment fiduciary in certain public employee retirement and pension systems not to consider ESG characteristics in a manner that would override fiduciary duties; not to be subject to any legislative, regulatory, or other mandates to invest with environmentally, socially, or other non-economically motivated influence unless consistent with the fiduciary's responsibility; and not to be subject to any legislative, regulatory, or other mandates for divestment from any indirect holdings in actively or passively managed investment funds.

■Requires all shares of common stock held directly by certain public employee retirement and pension systems to be voted solely in the economic interest of plan participants.

HB 770: Prohibits use of environmental, social justice, or governance scores or metrics

Introduced, but did not pass in 2023 legislative session

Legislation

Prohibit Discrimination on Basis of Social Credit or ESG Scores

■No state agency shall share or publish information, adopt laws, promulgate rules, or issue guidelines for purposes of social credit scores or other environmental, social justice, or governance scores or metrics that restrict the ability of any industry, including agricultural operations, to offer products or services. No state agency shall require any person or business to adopt or operate in accordance with social credit scores or other environmental, social justice, or governance scores or metrics.

SB 286: Authorizes the General Assembly and the Attorney General to review and prohibit implementation of certain federal actions in this state

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Authorizes the General Assembly to review presidential orders and declare them unconstitutional, including the regulation of the financial sector through the imposition of environmental, social, or governance standards.

SB436: Modifies provisions relating to fiduciary duties for investments of public employee retirement systems

Introduced, but did not pass in 2023 legislative session

Legislation

Restrict Use of ESG Factors; Focus on Pecuniary Characteristics

■Requires an investment fiduciary to discharge his or her duties in the interests of the participants in a public employee retirement system and their beneficiaries for the exclusive purpose of providing financial benefits and paying reasonable expenses for administering the public employee retirement system. Additionally, requires an investment fiduciary to take into account only financial factors when discharging fiduciary duties.

■Requires all shares held by or on behalf of a public employee retirement system, its participants, and their beneficiaries be voted solely in the financial interest of the participants in the system and their beneficiaries.

SUBSEQUENT DEVELOPMENTS

Tracks the Heritage Foundation's "State Pension Fiduciary Duty Act"

SB200: Creates provisions relating to firearms discrimination

Introduced, but did not pass in 2023 legislative session

Legislation

Target Entities that Boycott Certain Industries

■Prohibits Missouri public entities from entering into a contract with a company for the purchase of goods or services worth at least $100,000 and paid at least partly from public funds unless the company verifies in writing that it does not discriminate against firearms entities or trade associations and will not do so during the contract term. Only applies to companies with at least 10 full-time employees.

SB50: Prohibits giving preferential treatment or discrimination based upon ESG scores

Introduced, but did not pass in 2022 legislative session

Legislation

Prohibit Discrimination on Basis of Social Credit or ESG Scores

■Prohibits any public entity from discriminating or giving preferential treatment to any company based on an ESG score when engaged in procuring or letting contracts for any purpose.