Raising The Bar

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Half body portrait of Illinois Treasurer smiling against a backdrop of Chicago

“The investment decisions we make today will have a profound, lasting impact on our economy, our environment, and our quality of life for generations to come.”

Michael Frerichs

Illinois State Treasurer

The Illinois Sustainable Investing Act

In 2019, sustainable investment practices were codified into law. The Illinois Sustainable Investing Act (PA 107-473) provides that all state and local government entities that hold and manage public funds, including the Illinois Treasurer, “shall prudently integrate sustainability factors into its investment decision-making, investment analysis, portfolio construction, risk management, due diligence and investment ownership in order to maximize anticipated financial returns, minimize projected risk, and more effectively execute its fiduciary duty.” The Office maintains a standalone Sustainable Investment Policy Statement and also incorporates sustainability language and processes within each of its investment portfolios’ Investment Policy Statements to further fulfill its fiduciary duties to the people of Illinois.

Raising the Bar Through Sustainability

The Treasurer’s Office is working to raise investment standards by recognizing that environmental, social, human capital, business model, and governance practices can all influence a company’s performance over time. As a long-term investor, we combine traditional investment goals—strong risk-adjusted returns, low costs, diversification, and sound risk management—with a focus on sustainability and corporate responsibility. This approach helps protect shareholder value, support long-term growth, and encourage business practices that are more resilient, innovative, and responsive to the public interest.

Investing Means Making Choices

For the investment officers at the Illinois State Treasurer’s Office, it means choosing investments that are risk-appropriate, high-performing, and meet or exceed the benchmark.  It means making investments that reflect our commitment to sustainability, inclusion, and sound corporate governance, as these factors boost investment returns and strengthen the economic well-being of Illinois citizens and institutions.

Sustainable Practices Can Strengthen Long-term Value

Companies will struggle to create sustainable value if they do not build resilient relationships with stakeholders and address material risks driven by environmental, social, governance, human capital, and business model factors. Companies should develop strategic plans, identify and mitigate material risks, have adequate board oversight, and recognize emerging growth opportunities in their businesses to better position themselves to generate consistent, sustainable value. It is possible for companies to capture short-term profits through practices that do not adequately consider all stakeholders, but such an approach will not yield long-term growth. For investments made on behalf of college savers and retirement account holders, the Office of the Illinois Treasurer seeks companies with strong potential to generate long-term, sustainable value, meaning they will be profitable not just in the next fiscal quarter but throughout the next quarter century.

Sustainable Investment Report

Proxy Policy Reports

Policy Statement

Sustainable Investment Report

The Illinois Treasurer publishes an annual sustainable investment report. These reports detail the Illinois Treasurer’s sustainable investing priorities and activities for the relevant calendar year.