HB 1205 Summary

• Requires each public investment fund to develop, publish, and implement socially responsible investment (SRI) policies that incorporate environmental, social, and governance (ESG) factors into investment decision-making and portfolio management.

• Mandates consideration of specific ESG factors including corporate governance, environmental impact, social capital, human capital, and innovation factors when evaluating investments.

• Requires annual legislative reports on gross and net returns, fees paid to managers and related parties, carried interest distributions, and compliance with SRI policies.

• Mandates disclosure by private capital vehicles of in-state investments, jobs created or lost, tax revenues generated, tax benefits received, subsidies, lobbying fees, and environmental and social impact assessments.

• Takes effect July 1, 2021, and applies to funds including the University of Hawaii endowment, employees' retirement system, and various state trust funds, excluding financial institution deposits and processing services.