1. (a) In accordance with the board's duty under section 9 of this chapter, and except as provided in subsection (c), the board shall not:

   1. (1) enter a contract; or

   2. (2) modify, amend, or continue a contract;

      with a service provider that has made an ESG commitment unless taking the action described in subdivisions (1) and (2) violates the board's fiduciary duty to the system's participants and beneficiaries.

2. (b) The board shall replace a service provider that has made an ESG commitment with a service provider that is comparable in financial performance, so as not to violate the board's fiduciary duty to the system's participants and beneficiaries. If the board replaces a service provider, it shall do so within a reasonable time, but not later than one hundred eighty (180) days after receiving notice from the treasurer of state of the service provider's ESG commitment.

3. (c) If the board determines that there is not a comparable service provider to replace a service provider under subsection (b), the board shall continue contracting with the service provider that has made an ESG commitment. The board shall include in its minutes the:

   1. (1) decision that a comparable service provider does not exist; and
   2. (2) evidence supporting the decision under subdivision (1).

As added by P.L.206-2023, SEC.1.