After the attorney general for the state of Indiana issued Official Opinion 2022-3, Indiana Public Retirement System and ESG Investments (Official Opinion 2022-3) in response to questions Senator Eric Koch had about environmental, social and governance (ESG) regulations, a nonprofit organization needed counsel to understand the impact it would have on their obligations as fiduciaries and their ESG investing going forward. Faegre Drinker’s ESG team stepped in to provide clarity and guidance.
One fundamental question for the nonprofit organization was whether or not Official Opinion 2022-3 applied to them. While Official Opinion 2022-3 provisions apply to the fiduciaries of state pension and retirement plans, it also applies to certain provisions of the Indiana Trust Code and the Prudent Investor Rule, which are important to other fiduciaries. Faegre Drinker’s ESG team provided guidance on important considerations such as understanding exactly who in the organization is considered a fiduciary, what factors may be considered when investing, and whether these fiduciaries can continue to engage in ESG investing following the release of Official Opinion 2022-3.
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