SB1611

THE CONTEXT: Under current law, a public entity is prohibited from entering into a contract with a company to acquire or dispose of services, supplies, information technology, goods or construction unless the contract includes a written certification that the company is not currently using or engaging in: 1) the forced labor of ethnic Uyghurs in the People's Republic of China; or 2) a boycott of goods or services from Israel. Additionally, a public entity is restricted from adopting a procurement, investment or other policy that has the effect of inducing or requiring a person or company to boycott Israel (A.

WHAT THE BILL DID: The final vetoed version would prohibit a public entity, as a condition of entering into or renewing a contract with a company, to require the company to implement an ESG policy, restricts a public entity from adopting an investment, procurement or other policy that requires a company to implement an ESG policy, and define the following terms: a) Company; b) Environmental, social or governance standards policy; and c) Public entity.

WHY IT MATTERED: The practical reason for this bill was to set a clear legal boundary for public entities instead of leaving the conduct unaddressed. It would prohibit a public entity, as a condition of entering into or renewing a contract with a company, to require the company to implement an ESG policy, and would also restricts a public entity from adopting an investment, procurement or other policy that requires a company to implement an ESG policy, rather than leave the current rule unchanged.