The next Oregon Treasurer will be responsible for implementing and strengthening the Oregon Net-Zero Plan . The May 21 Primary will determine who will be the Democratic and Republican candidates for the position. The theme of the April 2 2024 Divest Oregon forum for the Oregon State Treasurer candidates was Building a Treasury for Tomorrow . Treasurer Candidates Jeff Gudman and Senator Elizabeth Steiner participated in the forum held at First Unitarian Church of Portland. Divest Oregon was pleased to welcome about a hundred to the in-person audience at the forum and the same number online. Alex Baumhardt of the Oregon Capital Chronicle was the moderator and drew from questions submitted by the audience. Candidate Republican Brian Boquist was invited to participate, but declined. The moderator referenced two recent Divest Oregon wins: Treasurer Read’s Net-Zero Plan for the Oregon Treasury and the 2024 COAL Act (HB 4083) encouraging the Treasury to stop investing in coal, phase out of current coal investments, and annual reporting on those actions. The candidates were asked about their plan to get PERS to net zero emissions. Senator Steiner congratulated Divest Oregon for pushing to get Treasurer Read to formulate a net zero plan and noted the plan’s failure to include scope 3 emissions (author’s note: for example the emissions from burning coal as opposed to Scope 1 emissions from mining coal). She indicated confidence in her ability to discern greenwashing, or the shading of the truth, by companies in which the Treasury has invested. Jeff Gudman approved of the shareholder engagement with fossil fuel companies included in the plan. He pointed out that the increase in green investing in the plan simply tracks market projections and noted, “We can do better.” In addressing the lack of transparency of private investments, Gudman suggested reporting after a fund closes out of investments made during the life of the fund. He also suggested reporting on categories of investment rather than specific investments. Steiner affirmed having a diverse portfolio with public and private investments. She suggested more transparency in the guidelines for picking private funds and managers. Both candidates said it would not make sense in the long term to invest in fossil fuels, but did not commit to a definition of long term. Senator Steiner said we need to drop fossil fuel investments before “they become less and less profitable.” Gudman said we need to enforce companies’ “standards” through shareholder engagement. Steiner devoted her summary to the toll of financial insecurity and the role of the Treasury in promoting savings plans as well as preserving retirement funds. In his closing statement, Gudman said the Treasury is already doing a good job in managing its existing programs. He touted a second role of the Treasurer: to use the bully pulpit to promote, for example, allocation of kicker dollars or “using carbon credits to address the climate crisis that we are in.” The forum was followed by a candidates’ reception and a celebration of the work and the wins of the Divest Oregon coalition.

The latest Oregon State Treasury (OST) data for June 30, 2023 reveals that when it comes to its fossil fuel holdings in its portfolio, the Treasury is still following a “business as usual” approach. The consequence of this risky business strategy is falling value in its fossil fuel investments. As discussed in the Divest Oregon report, Oregon State Treasury Coal Investment Performance Report , coal prices are dropping and production costs are increasing. This value drop is across all its fossil fuel holding types, as detailed in the January 2024 report by IEEFA , noting a negative outlook for the oil and gas industry. As a result of Divest Oregon making repeated public records requests for data of the Oregon Treasury’s portfolio holdings, starting with the 2021 data, each December the Treasury now publishes information about some of the investments on their web site. Divest Oregon published its methodology last year . Continuing their year on year comparison showed that COAL/GCEL holding value reduced ∼ 30%.

In the Fall of 2023, Divest Oregon’s legislative workgroup faced a dilemma. In the 2023 Legislative session, the coalition’s Treasury divestment bill (Treasury Investment and Climate Protection Act - HB 2601 ) had not made it out of legislative committee. Now we were facing a short session where there simply was not time for the kind of patient politics that might bring more legislators on board for such a bill. Yet, Oregon was just coming through the hottest summer on record: climate change was clearly accelerating, and the science was clear that fossil fuels were driving this dangerous change. So the workgroup studied the concerns of legislators and the Treasurer: All of us shared the goal of protecting the Public Employee Retirement Fund (PERS) for Oregonians. However, as long as the Treasurer opposed a bill, we could not move enough legislators to action, even by showing data that fossil fuel divestment would improve the Treasury’s financial position. With these facts in mind, the workgroup decided on a 3-pronged approach for the COAL Act – the Clean Oregon Asset Legislation bill – HB 4083 with Representative Khanh Pham as the chief sponsor of the bill and Senator Jeff Golden as the co-chief sponsor in the Senate. First, crafting a bill that was right-sized for the short session. From Divest Oregon research based on public records requests for data from the Treasury, it was now public knowledge that the Treasury was investing at least $1billion in coal-based projects. Whenever Divest Oregon members discussed this with anyone, jaws dropped. “Coal? Really?” So thermal coal (coal used in power plants) – one of the worst emitters of CO2 and pollution – became the focus of the bill. The major arguments presented in the one-pager to legislators focused on the scale of the issue and the fiscal need for the bill. Additional Divest Oregon research suggested that over an 8 year period the Oregon PERS’ coal investments had underperformed, with the research corroborating data from California’s CalPERS about the savings they experienced from coal divestment. Second, engagement with the Treasurer and his staff. Although the Treasurer was creating a net zero plan, and acknowledging publicly that fossil fuels and climate change posed significant risks to financial returns, Divest Oregon had concerns that this plan would not meet the urgency of climate change. So Rep Khanh Pham, in consultation with Divest Oregon leaders, met regularly with the Treasurer and his chief of staff to hammer out language for the bill that was acceptable on all sides. The language of the bill became advisory, similar to the Sudan divestment bill of 2005, which had successfully resulted in the Treasury removing over $300 million in investments from Sudan. The definition of coal investments were aligned with the definition in the Treasurer’s net zero plan. Ultimately, the Treasurer agreed to testify in favor of the bill. Third, Divest Oregon advocated for the COAL Act with every legislator in a variety of ways. In January 2024, as the beginning of the short session approached, Divest Oregon organized 100 concerned constituents to go to Salem for a Lobby Day to solidify support and bring legislators on board. Wearing green and sporting Divest Oregon buttons on their lapels, many small groups of voters crisscrossed the capitol building as they went to 35 separate appointments with their representatives and senators. Some more-distant constituents participated via Zoom, through laptops hand-carried to these appointments. At the luncheon afterward, the Lobby Day participants shared three common themes in legislators’ reactions: “Coal? Really? Why are we still invested in that?” “We must protect PERS.” “Does the Treasurer support this bill?” They also reported that, once reassured on these points, many legislators indicated their support for the bill and signed up as co-sponsors. Thank you notes were signed on the spot, and postcards prepared to follow up once the session commenced, workgroups met, and voting began. Throughout the session, coalition members continued to call, email, and meet with their legislators to urge their support for the COAL Act. Two hundred letters of support for the bill were registered as part of the committee hearings (and a mere 8 in opposition.) Rep Khanh Pham, Senator Jeff Golden, and many concerned Oregonians testified passionately and knowledgeably in support of the bill in the legislature’s House and Senate committee public hearings. The Treasurer’s own testimony included his statements that the “The issue of climate change broadly is an urgent risk to the investment returns of the Oregon Public Employee Retirement Fund,” and that the COAL Act “is complementary” to his net zero plan. Only a day before the end of the short session, the COAL Act passed its final hurdle. Once the Governor signs, the COAL Act will become law, and Oregon will become the third state to pass a public pension divestment bill in the United States, after the Maine divestment bill of 2021 and the California coal divestment bill of 2015. Divest Oregon, with all coalition partners, plans to celebrate this historic win on April 2nd, at a reception following the Oregon Treasurer Candidate Forum .

The Oregon Net-Zero Plan was released in February 2024 - one of the first in the United States. Divest Oregon has reviewed, summarized, and analyzed the report to answer the question: Does the Net-Zero Plan meet the demands of the campaign to remove financially and climate risky investments from the Oregon Treasury funds?

Testimony by Dan Cohn, Energy Finance Analyst Institute for Energy Economics and Financial Analysis To the Oregon State Legislature, House Committee on Emergency Management, General Government, and Veterans on House Bill 4083 I submit this testimony in support of House Bill 4083. The coal industry is exposed to significant investment risks as its market position rapidly declines. House Bill 4083 would be protective of the value of Oregon’s pension investments. The present bill would direct the State Treasurer to avoid new investments into the thermal coal industry; review the pension fund’s current holdings for thermal coal companies; and dispose of thermal coal company securities in a prudent manner, with exceptions made for companies that are transitioning their business into renewable energy on a timeline acceptable to the Oregon Investment Council. Decreasing the state’s exposures to coal is judicious in light of the industry’s declining prospects. “Thermal” coal is coal mined for combustion in power plants to produce electricity. It comprises the lion’s share of U.S. coal production . The amount of coal burned each day in the U.S. has fallen from about 2.8 million tons a day in 2008 to roughly 1.1 million tons a day in 2023— a 62% drop . Coal’s share of electricity generation has fallen significantly and faces further declines. Final figures for 2023 are expected to show coal falling short of a 20% share of the U.S. power market. This stands in contrast to all years before 2020, when coal’s market share never dipped below 20%. This about-face is expected to persist in the near-term, as large coal stockpiles at power plants decrease the need for additional coal purchases. The U.S. Energy Information Administration predicts that total coal mined in 2024 could fall nearly 20% from last year, with further declines in 2025. The coal industry has negligible prospects for turning around its shrinkage. No new coal-fired power plants have been announced in the U.S. for many years. Coal fired power generation cannot compete on price with natural gas, wind, or solar. Proposals to use coal for non-combustive purposes have not seen significant commercial deployment . Instead, electric utilities have announced new construction of nearly 12 times more solar, wind, and battery storage capacity than the next largest source of new generation, gas-fired power plants. The future for the coal industry is reflected in its miniscule share of the stock market’s value. At the end of 2023, the coal industry weighed in at a mere 0.038% of the Russell 3000, a commonly recognized index representing U.S. stocks. (FTSE Russell. Russell 3000 Sector Weight Holdings Data. December 29, 2023.) The present bill directs the Oregon Investment Council and State Treasurer to reduce exposure to coal in a way that is protective of the portfolio’s long-term value: The bill respects the fiduciary duties of the Council and Treasurer by requiring any investment actions to be prudent and reasonable and by setting as a goal “no monetary loss” to the fund from these activities. The bill advises the fund to make use of existing knowledge and expertise. By expressly permitting consultations with peer pension funds that have already divested from the coal industry, the Treasurer and Council may reduce costs and increase confidence in the decisions made pursuant to this law. By encouraging the fund to utilize the materials produced by the German organization Urgewald, the bill sanctions the use of one of the most comprehensive lists of coal industry participants available. It is prepared with meticulous attention to detail and is provided free of charge. The bill requires annual reporting of the Treasurer’s actions in this area until coal holdings are eliminated. Regular and transparent reporting is an essential element to establish trust in public processes and commitments.

On February 6, 2024, Oregon Treasurer Read released "A Pathway To Net Zero: Positioning The Oregon Public Employees Retirement Fund For A Net Zero Carbon Future." The Divest Oregon response, provided to the Treasurer's office, is as follows:

Broad Oregon coalition endorses 2024 COAL Act (HB 4083) to phase out state’s coal investments Introduced by Rep. Khanh Pham (D-SE Portland), the Clean Oregon Assets Legislation Act (COAL Act) will phase out the state’s public investments in coal companies, estimated at one billion dollars. Salem, OR -- Public sector unions, faith communities, and environmental groups are urging Oregon lawmakers to pass HB 4083, the Clean Oregon Asset Legislation Act (COAL Act) developed through regular, positive engagement with the Oregon State Treasury. The COAL Act will transition Oregon off the state’s coal investments, stop new coal investments, and require regular reporting from the Oregon State Treasury on these initiatives. There are seven chief bill sponsors joining Representative Khanh Pham (D-SE Portland), Representative Mark Gamba (D-Milwaukie), and Senator Jeff Golden (D-Ashland) in working to pass the bill this winter. The COAL Act is endorsed by Divest Oregon, a coalition representing 100 organizations including unions with tens of thousands PERS members, racial and climate justice groups, youth leaders, and faith communities. “The climate emergency is here now, and that’s why Oregon has already committed to move away from coal and source 100% clean energy by 2040. The COAL Act will begin to align our public investments with our existing climate commitments by moving nearly one billion dollars of Oregon State Treasury funds out of coal company stocks,” said Representative Khanh Pham, chief sponsor of the bill. “We owe it to every Oregonian to steward your public funds and pensions wisely, and with an eye towards long-term returns. With hundreds of billions of dollars of public and private investment pumping into clean energy under the Inflation Reduction Act, and the grave risks that coal pollution poses for our climate, there is simply no future upside in coal energy. The COAL Act will ensure that Oregonians’ financial futures are protected from short-sighted investments in the dirtiest fossil fuel.” The COAL Act is co-chief sponsored by a broad coalition of lawmakers in both chambers: Representatives Khanh Pham (D-SE Portland), Mark Gamba (D-Milwaukie), Rob Nosse (D-NE & SE Portland), Hoa Nguyen (D-E Portland), Tom Andersen (D-Salem), Thuy Tran (D-NE & SE Portland), and Maxine Dexter (D-NW Portland), with Senators Jeff Golden (D-Ashland), Wlnsvey Campos (D-Aloha), Chris Gorsek (D-Gresham), and Michael Dembrow (D-NE & SE Portland). Regular co-sponsors include: Senators Kayse Jama (D-E Portland), Deb Patterson (D-Salem), and Janeen Sollman (D-Hillsboro), with Representatives Julie Fahey (D-W Eugene), Farrah Chaichi (D-Aloha), Paul Holvey (D-Eugene), Nathan Sosa (D-Hillsboro), Lisa Reynolds (D-NE Washington County), and Pam Marsh (D-So Jackson County). The COAL Act would not be the first bill to respond to a coal energy sector in decline . In 2015, California mandated a coal investment exit with Senate Bill 185 , saving the California Public Employees Retirement System (CalPERS) an estimated $598 million . The Oregon State Treasury, which manages the Public Employee Retiree System (PERS) fund (the nation’s 12th largest), invests over one billion dollars in the coal sector (as of June 30, 2022). According to modeling analysis by Divest Oregon, the Oregon State Treasury's public equity coal holdings underperformed the market by $340 million since 2014 when compared to the S&P 500 Fossil-Fuel Free Index. Retired PERS member, educator, veteran, and West Salem resident John Skelton was among roughly 100 Oregonians who met with their legislators on January 10 to support the COAL Act. “Oregon divesting from its billion-dollar coal investment is good for the prosperity of Oregon, the security of our retirement funds, and the world we leave to our grandchildren,” he said. “If my investment counselor recommended investing in coal, I’d find a new advisor.” The COAL Act would also not be the first bill of its kind in Oregon. The 2024 COAL Act was drafted using aspirational language, as requested by Oregon Treasurer Tobias Read, modeled on the 2005 Oregon Human Rights and Anti-Genocide Act (Senate Bill 1089) which set guidelines for divestiture from companies doing business in Sudan. The COAL Act also aligns with Oregon’s commitment to phasing out of coal as a power source starting in 2016 (the state’s final coal-power plant in Boardman was shuttered in 2020). “The COAL Act gives the Treasury latitude to choose how to best implement the goal of this coal exit and we look to the Treasury’s professional staff to identify and shift funds to the many alternatives that perform as well or better,” said Jenifer Schramm of Divest Oregon. “The costs of not passing this bill are real: coal is a dying industry with diminishing returns and a toxic legacy. The COAL Act aligns with precedent in California, existing policy in Oregon, and best practice globally. With the COAL Act, we can save money and take a small step toward justice, especially for frontline communities and communities of color that have borne the brunt of coal-fired power plants.” When coal is burned it releases a number of carcinogenic toxins and pollutants . It is the dirtiest way to produce electricity and the global coal phase out must be given policy prioritization , according to the United Nations. “This COAL Act will help Oregonians move towards a clean energy transition, and it is aligned with the Oregon State Treasury’s fiduciary duty to maximize the value of its funds under management for its beneficiaries ” said Ariana Jacob, President of AFT-Oregon, a union representing 18,000 education workers in Oregon. “As teachers we have a responsibility to make sure our students inherit a safe and healthy environment so that they can thrive. Moreover, as public servants, our future health and security is directly tied to the long-term performance of PERS. Given the clear warning signs from the market and the even clearer warning signs about the world our children are inheriting, there is simply too much risk to continue to invest in coal.” /ENDS Note to Editors: Oregon State Treasurer Tobias Read will be releasing a net-zero plan for Oregon PERS at a special meeting of the Oregon Investment Council on February 6.

Coal is a dying industry, it has declined in value over time, and its use is harmful to the health of all life forms. An increasing number of financial institutions, and public pension funds such as NYCERS, CalPERS and CalSTRS, are exiting coal to avoid holding stranded assets. Yet, as of June 30, 2022, the Oregon State Treasury (OST) had over $1 billion invested in thermal coal-related stocks, bonds and private investment funds, and these investments support the retirement of over 380,000 members of the Public Employees Retirement System (PERS). Divest Oregon set out to analyze how those coal stocks have performed over the last nine years to determine if they have underperformed or performed well when compared to investing in the Standard and Poor’s (S&P) fossil fuel free index. PERS’ public equity holdings as of June 30, 2022 were reviewed using the Global Coal Exit List from Urgewald (GCEL). GCEL is a list of companies that covers the entire thermal coal value chain from coal exploration and mining to coal power production and coal gasification. It was created by Urgewald to give financial institutions a tool to understand the coal holdings in their portfolios. For 2021, the most recent GCEL available when the analysis was done, any company that generated 20% or more of its revenue or power generation from coal was on the list. It is updated annually and is the most comprehensive public database on the global coal industry. The review generated a set of 152 specific coal holdings with a market value of $610 million as of June 2022. If the PERS holdings in those coal companies had alternatively been invested in the S&P fossil fuel free index fund starting in January 15, 2014, they would have outperformed the coal investments by an estimated $340 million.

At a roundtable with Divest Oregon organizations and Treasurer Read in August 2023, Divest Oregon was provided the following PERS emissions data (additional follow up details were provided by the Treasury). This chart shows Emissions Intensity by PERS asset class. Notably missing are other private investment asset classes of Opportunity, Alternatives, and Diversifying Strategies.