SALEM, Ore. – The Oregon State Treasury has at least $5.3 billion invested in fossil fuel companies, a coalition of environmental groups said in a report Wednesday that blamed the state for adding to global warming and urged divestment.
Oregon is considered a “green” state, through its goal of reducing greenhouse gas emissions by state agencies and being the first state to commit to stop using coal-fired power. Yet the state treasury is working at cross-purposes with over $1 billion invested in the coal industry alone, Divest Oregon said in its report.
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“The state exposes Oregonians to climate and health risks, economic costs, and financial losses” through the investments, the group said.
The amount that Oregon has invested in oil, gas and coal companies — whose products are a leading cause of global warming — is probably far higher than $5.3 billion. That's because the numbers that Divest Oregon obtained from the state treasury through a public records request do not include private equity investments, which are not subject to public disclosure.
The treasury welcomes “continued dialogue with Oregonians on the best ways to address the risks of climate change while ensuring that we meet our mandate to produce sustainable returns for beneficiaries,” department spokeswoman Amy Bates said.
"We’re committed to a portfolio that reflects the realities of a changing climate, and a changing policy environment, while earning money for tens of thousands of Oregonians’ retirement security,” Bates said.
Oregon State Treasurer Tobias Read is running for the Democratic nomination for governor in the November elections. One of his platforms is combating climate change.
“As governor, I will lead the effort to decarbonize our economy and avert the worst of this crisis,” he said in a recent campaign statement. “I will bring a renewed sense of urgency to building a clean energy economy and the critical infrastructure needed to meet the challenges we face.”
Yet Tobias' agency, which manages $140 billion of the state’s investment portfolio, including the state employees pension fund, is too deep in investing in fossil fuels and instead should dispose of those investments and put more behind green energy, Divest Oregon said.
Fossil fuels investments also perform worse than fossil-fuel-free alternatives, the report said.
The report's findings of fossil fuel sector investments are far higher than the $1.8 billion that a previous study released in December said was invested in the industry. That report, by the Climate Safe Pensions Network, said its findings were based only on partial data released by the treasury “due to delays in disclosure by the pension fund" and that the actual amount was likely much higher.
A bill that would have increased transparency in the state treasury's investments passed the Oregon House of Representatives in March. But it died in the Senate before receiving a floor vote there when the short legislative session ended.
Sen. Jeff Golden, one of the sponsors of that measure, said if he wins re-election this year, he will make another effort in the 2023 session.
“If I’m back in Salem next session, I’ll work to advance the divestment discussion,” Golden said. “Full public disclosure of investments made possible with public dollars seems like the very least we should all expect.”
The burning of fossil fuels like coal and gas emits gases that are a leading cause of global warming and climate change. Oregon has been suffering the effects of climate change, with a record-breaking heat wave last summer that killed more than 100 people, a severe drought affecting much of the state and worsening wildfires.
“Oregon has a green economy, grounded in renewable energy, agriculture, and a historical commitment to protecting our natural spaces,” the environmental groups said in the new report. “Building on this legacy and leading the country forward requires bold leadership from every governmental agency including, critically, divestment by the Oregon State Treasury.”
Meanwhile, more states are taking steps toward divesting.
On Feb. 9, New York state Comptroller Thomas DiNapoli announced that the State Common Retirement Fund will restrict investments in 21 shale oil and gas-producing companies that have failed to demonstrate they are prepared for the transition to a low-carbon economy.
“As market forces and new policies drive the energy transition, we must align our investments with a profitable and dynamic future,” DiNapoli said. “The shale oil and gas industry faces numerous obstacles going forward that pose risks to its financial performance.”
The oil and gas industry, including shale oil and gas companies, “may be most affected by climate change and the transition to the emerging net zero economy,” DiNapoli's office said.
Maryland lawmakers passed a bill this session that requires a fiduciary of the State Retirement and Pension System to consider the potential systemic risks of the impact of climate change on the system’s assets.
Maryland Gov. Larry Hogan wrote that while he decided not to veto the bill, he still has “serious concerns about politicians interfering with the fiduciary duties of of the Maryland State Retirement and Pension System.” He wrote that while the legislation is “well intended,” it "creates a slippery slope; instead of micromanaging ... elected officials should allow our investment experts and professionals to do what they do best.”
Divest Oregon is a statewide grassroots coalition of individuals and organizations representing unions, racial and climate justice groups, youth leaders and faith communities.
The report was produced in partnership with Stand.Earth, 350.org, the Private Equity Stakeholder Project, Environment Oregon, Ecumenical Ministries of Oregon and Oregon Physicians for Social Responsibility.
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Associated Press writer Brian Witte in Annapolis, Maryland, contributed to this report.