In September 2017, the SBI adopted a set of Investment Beliefs (pdf) for managing the assets of the Combined Funds (those funds utilized to support the defined benefit pension plans of the State’s employees). The primary purpose of these Beliefs is to guide the SBI toward sound investing principles related to investing on behalf of the Combined Funds. In this respect, the Beliefs help provide context for SBI’s actions, reflect SBI’s investment values, and acknowledge SBI’s role in supporting the State’s broader retirement systems.

One of these beliefs is as follows:

Utilizing engagement initiatives to address environmental, social, and governance-related (ESG) issues can lead to positive portfolio and governance outcomes.

In addition to specific engagement strategies the SBI might apply, proxy rights attached to shareholder interests in public companies are also “plan assets” of the SBI and represent a key mechanism for expressing SBI’s positions relating to specific ESG issues.  By taking a leadership role in promoting responsible corporate governance through the proxy voting process, SBI can contribute significantly to implementing ESG best practices which should, in turn, add long-term value to SBI’s investments.


Initiatives and Engagement

In the last several years, the SBI engaged various initiatives with companies in which the SBI holds an interest in its investment portfolios. For example:

  • In 2020 the SBI began engagement with Hess Corporation and in 2021 started leading and engagement with Marathon Oil. These engagements focused on the disclosure of targets to reduce flaring intensity and methane emissions intensity. 
  • In 2022, the SBI filed shareholder proposals at several Midwest companies including, Perficient, R1-RCM, and OptimizeRx. The SBI withdrew each of these proposals after the companies improved their disclosure and recruitment policies related to board diversity. 

All of these engagements are done with support from other institutional investors.


In addition to engaging with companies, the SBI engages with regulatory authorities on ESG issues impacting institutional investors. The SBI:

  • Submitted a comment to the Securities Exchange Commission in 2020 opposing new rules regulating SBI’s proxy service providers.
  • Submitted a comment to the U.S. Department of Labor in opposition to amended rules regarding ESG considerations in ERISA regulated investment portfolios.
  • Submitted a comment to the Securities Exchange Commission in 2022 supporting the SEC's "Proposed Rules for The Enhancement and Standardization of Climate-Related Disclosures for Investors."