April 20, 2022
New report: “Risky Business: Oregon Treasury’s Fossil Fuel Problem”
The Oregon State Treasury needs to change its investment strategy, concluded a new report released today by the Divest Oregon coalition. “Risky Business: Oregon Treasury’s Fossil Fuel Problem“ details the investments in fossil fuels made by the Oregon State Treasury that are known to the public, and outlines how continued support of the fossil fuel industry by the state exposes Oregonians to climate and health risks, economic cost, and financial risks. “Risky Business” reveals how the Oregon State Treasury has at least $5.3 billion invested in fossil fuel companies with over $1 billion invested in the coal industry alone.
“This report from Divest Oregon makes a moral and compelling economic case for divestment from fossil fuel. The authors of this report show that fossil fuel investments are not economically viable or profitable in the short, intermediate, or long term,” said Dr. Idowu Jola Ajibade, Assistant Professor in the Department of Geography at Portland State University. “Recent investments in this industry have delivered terrible returns, leading to the loss of billions of dollars and this trend could worsen in years to come. In the past two decades, Oregon has experienced the devastating impacts of climate-related hazards on communities and fragile ecologies and these are reminders why divestment from fossil fuel is a crucial step toward climate mitigation.”
In light of the risks posed by fossil fuels, and the associated loss on investments, the report recommends that the Oregon State Treasury 1) stop all new investments in fossil fuels; 2) annually release a public list of all portfolio holdings in every asset class; and 3) phase out all current fossil fuel holdings and move to climate-safe investments, using a social justice framework that accounts for climate impacts on frontline communities across the state, including rural communities and communities of color.
“As other states and asset managers have realized, no notion of fiduciary duty requires asset managers to continue to invest in underperforming assets, particularly ones whose very existence is incompatible with a habitable planet. It is beyond time for the Oregon Investment Council to catch up and to take action to make Oregon divest from these toxic assets,” said Nathan Karman, an Oregon Public Employee Retirement System (PERS) member.
The Oregon State Treasury manages roughly $140 billion. $100 billion of this is in PERS, the 56th largest retirement fund in the world in 2021. In addition to PERS, the Oregon State Treasury also holds investments in various other funds (such as the Oregon Short Term Fund) and is heavily invested in private equity (26% of PERS), funds which are broadly exposed to fossil fuels and whose management routinely face allegations of “low-road’ labor practices.
“The battle to wind down the fossil fuel industry proceeds on two tracks: the political … and the financial. Those tracks cross regularly — the influence of money in politics is clear on energy legislation — and when we can weaken the biggest opponents of climate action, everything gets easier,” said Divest Oregon guest speaker and Third Act founder Bill McKibben. “Divestment has helped rub much of the shine off what was once the planet’s dominant industry. If money talks, $40 trillion (in divestment) makes a lot of noise.”