US state and federal laws have increasingly sought to regulate environmental, social, and governance (ESG) investing—a trend that continued in 2023. This increased regulatory focus has impacted benefit plans, including ERISA plans and, especially, public retirement plans.

As of January 1, 2024, 20 states implemented anti-ESG investing rules, eight implemented pro-ESG investing rules, and three implemented disclosure of ESG investing rules. There are many more proposed pieces of state legislation currently pending, while congressional interest has also risen. These issues can impact ERISA plans and public retirement plans both directly and indirectly (depending upon the rule). 

For a summary of recent regulatory developments on the ESG investing debate, please see the LawFlash The ESG Investing Debate: 2023 Year-End Updates.