Oregon authorities instruct state pension fund to tackle climate change hazards

In a significant move towards a greener future, the US state of Oregon has approved a bill that directs its state treasurer to address climate change threats to the pension savings of public workers. This bill, which encourages the state treasury to support the transition to a cleaner energy future in its management of about $101bn in the public employee pension fund, has received praise from environmental groups and campaigners alike.

According to analysis by Ortec Finance, if predictions for the worst global warming materialise and if the current approach to climate policy doesn't change, US and Canadian pension fund returns could fall up to 50% by 2040. This underscores the importance of the steps Oregon is taking to protect its pension funds from the potential impacts of climate change.

The bill, which was passed by Oregon's legislators, also mandates the state's public pension to implement its sustainable investing plan. The Sierra Club applauded this move, noting that the Oregon state pension fund's sustainable investing plan was the first of its kind to receive the backing of a state legislature among peers such as those in New York City, New York State, and California (CalPERS and CalSTRS).

The Sierra Club published a report in February ranking the Oregon state pension fund sixth out of 32 US state pension funds in terms of its response to the climate crisis. This is a significant improvement, and the club has called on trustees to make sustainable investment decisions and use their voting power to push companies they invest in to go green.

Tobias Read, the Treasurer of Oregon, is responsible for ensuring climate protection in the public employees' retirement savings and supporting the transition to a cleaner energy future. He stated that the climate resilience investment act protects employee retirement funds by enabling Treasury's investments to take full advantage of the opportunities the clean energy transition creates.

The bill also confirms the fiduciary responsibility of the treasury to retirees, requiring the treasury to produce regular reports to the legislature. This transparency is crucial in ensuring that the pension funds are managed responsibly and with the best interests of the retirees in mind.

Pressure is mounting on pension funds to take more account of climate change risks. This is evident in the administration of US president Donald Trump's plans to overturn a rule that allows pension funds to consider ESG factors when making investment decisions. However, states like Oregon are leading the way in demonstrating that climate-conscious investing can be a win-win for both the environment and the economy.

Campaigners are also calling for similar action in other states. For instance, two bills have been reintroduced in New York's senate, requiring climate disclosure rules similar to those adopted by California in 2023. A bill requiring greenhouse gas emissions disclosures was also introduced in Colorado in January.

Tim Miller, director of Oregon Business for Climate, stated that the world is moving toward a carbon-free future and it's not turning back. Damon Motz-Story, director of the Sierra Club's Oregon chapter, added that Oregon's communities are already preparing for and responding to extreme wildfires, a clear signal of the worsening climate crisis.

In conclusion, Oregon's move towards climate-conscious pension investing is a significant step forward in addressing the impacts of climate change on pension funds. Other states are encouraged to follow suit, ensuring a greener and more sustainable future for all.