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In his final year as Oregon State Treasurer, Tobias Reed is proposing a roadmap to make the state’s $100 billion pension fund carbon neutral by 2050.
Reed spoke Thursday at a meeting of the Legislature’s Emergency Management, General Government and Veterans Affairs Committee, a day after environmental groups visited the Capitol to promote another bill that would strip the state of the Public Employees’ Retirement System (PERS). He previewed his “Net Zero Plan” at Part of coal investment.
The state retirement fund covers approximately 400,000 current and former public employees. According to some sources, more than $5 billion of the fund’s $100 billion is invested in fossil fuel companies. recent analysis From the nonprofit environmental coalition Divest Oregon. This does not include investments in private equity funds, which the group does not investigate because they are not subject to freedom of information laws.
Divest and other environmental groups have been pressuring Mr. Reid for years to divest the fund from fossil fuels and stop investing in fossil fuel companies, but Mr. I responded that it was my job to guarantee that.
Reed’s net-zero plan was developed in partnership with global consulting firm McKinsey & Company at a cost of $1.9 million, according to sources. Copy of contract This information was obtained through a public records request by Rick Pope, a volunteer with the nonprofit environmental coalition Divest Oregon.
Mr. Reid’s office declined to send him a draft of the net-zero plan ahead of Thursday’s meeting, but shared his views. 11 page presentation to the Legislative Committee. Treasury spokesman Eric Engelson said he hopes to have the plan ready for distribution by Jan. 31. The plan does not divest the state’s retirement funds of all fossil fuel holdings and investments in carbon-emitting industries, but it does invest in those companies and industries and in companies that reduce or absorb emissions. to maintain a balance with.
“It’s not that we won’t include carbon emissions in our portfolio. We do. I don’t think it’s possible to avoid it,” Reed told the committee Thursday. “What we want is a position where those emissions are balanced by the earth’s ability to absorb them naturally and by technological solutions.”
Reed plans to submit the proposal to the five members of the Oregon Investment Council on Feb. 6 for consideration. Mr. Reed serves on the Board of Trustees as Treasurer. After consideration by the city council, the plan will be submitted to council for consideration in February. Reed said lawmakers will meet several times before deciding whether to provide resources to implement it over the next few years.
The project’s “implementation period” is four years, starting in 2024, with the state Treasury planning to shift some investments from fossil fuel companies and high-emission industries to investments that help reduce greenhouse gas emissions by 2028. It is written that. .
“I expect there’s a good chance that the next Treasurer will ask for the authority to add brainpower to do this work right under your noses and under your colleagues’ noses,” he told a legislative committee. Stated.
Mr. Reid’s term as Treasury Secretary officially ends in January 2025. He is running for Secretary of State and is currently facing Sen. James Manning (D-Eugene) in the May 21 Democratic primary. He is also running for Republican real estate broker Brent Barker.
Pope said Reid, who is now moving towards a net-zero portfolio, recognizes that some fossil fuel investments actually carry more risk than return.
“We and our treasurers now agree that climate change is a threat to PERS investors,” Pope said.
coal law
Oregon divest is behind another project suggestion Diverting national investment away from fossil fuels by targeting coal. The Clean Oregon Assets Act (COAL Act) is sponsored by Representative Khan Pham (D-Portland), Senator Jeff Golden (D-Ashland), and Representative Mark Gamba (D-Milwaukee). . It would direct the Treasury Department to sell the National Retirement System’s holdings in companies that mine and burn coal. Divest identified approximately $1 billion of the fund’s investments in the coal industry. Divest members visited Parliament House on Wednesday to meet with lawmakers ahead of February’s legislative session.
The law is modeled after a similar policy passed in California in 2015. The California Department of State, which oversees the state’s retirement fund, estimates that the divestment from coal over the past eight years has added nearly $600 million to the fund’s bottom line, according to a statement. Sell Oregon.
The law’s sponsors also pointed to a 2005 Oregon law that directed the Treasury Department to divest from companies doing business in Sudan following the U.S. government’s declaration that the Sudanese government was participating in genocide. is modeled after.
Supporters point out that Oregon leaders voted to phase out coal as an energy source in 2016 because coal is one of the most polluting energy sources. . Oregon was the first state in the United States to pass a law phasing out coal. Power companies are obligated to provide coal-free electricity by 2035. Divest said the state Public Employees Retirement Fund should take similar steps.
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