Oregon Treasury’s “Net Zero” Bill, HB 2081, passed both chambers of the Oregon Legislature on June 16, 2025. This legislation directs the Oregon State Treasury (OST) and the Oregon Investment Council (OIC) to manage and report on climate-related financial risks to the Oregon Public Employees Retirement System (OPERS). Introduced by State Treasurer Elizabeth Steiner, the bill intends to align PERS’ investment strategies with the state’s climate goals while upholding fiduciary duties.

HB 2801 is a step in the right direction for low-emission investments in the Oregon State Treasury, but it is only a first step toward addressing climate risk. Significant limitations must be addressed through Treasury policy or future legislation.

Specifically:

• It acknowledges climate change risks but only addresses Scope 1 and 2 emissions, which means continued investment in scope 3 sectors, like oil and LNG (liquified natural gas) terminals, is still possible. Critically, the bill fails to focus on fossil fuel holdings within private investments, which comprise nearly 60% of OPERS holdings.
• It highlights Just Transition principles, yet the bill applies these principles solely to public equity holdings, excluding private investments. This again overlooks a large segment of OPERS holdings.
• It aims to reduce the OPERS portfolio’s carbon intensity by preferring investments that cut net greenhouse gas emissions. However, there are no defined timelines, and the vague definitions could allow for superficial compliance without real progress in decarbonization.
• Biennial reporting is mandated, enhancing transparency, but annual reports would offer greater accountability.

The bill was passed with bipartisan support and the support of all major labor unions representing PERS beneficiaries. It reflects a shared commitment to safeguarding the financial health of PERS in consideration of the risks posed by climate change. HB 2081 takes effect on the 91st day following the adjournment of the 2025 regular session of the Eighty-third Legislative Assembly.

What this means for the divestment movement: 

Although the provisions in HB 2081 stop short of enacting sweeping change, the legislation is a promising first step and a national first. By formally acknowledging the need for investment decarbonization, Oregon’s legislature validates the divestment movement and signals growing economic and social momentum toward greener portfolios.

Looking ahead, Oregon and other states can leverage HB 2081 to advance the fossil fuel divestment argument. Once the new regulations take effect, we can track how they impact Oregon PERS’s returns, providing critical evidence of the fiduciary case for shifting away from fossil fuels and private equity. With Oregon PERS now restricted from fossil-heavy stocks, economists and advocacy groups will have a real-world case study in portfolio success.

To read more about HB 2081 and what it means for Divest Oregon’s campaign, visit the HB 2081 webpage.

The article entitled, “Oregon moves closer to law requiring carbon neutral public retirement plan” discusses the bill in detail (Oregon Capital Chronicle, 6/16/2025).