Treasury’s Investing Methods Appear to be At Odds With CRIA’s Preference for Lowered Emissions
The Climate Resilience Investment Act (CRIA) mandates that Treasury and the OIC pursue reducing greenhouse gas emissions from OPERF investments
Because of financial risk to OPERF values from climate change, former Treasurer Read in 2024 introduced a Net Zero Plan with a goal of a 60% reduction in the greenhouse gas emissions intensity of OPERF assets by 2035, and net zero OPERF emissions by no later than 2050. (OIC 2-06-2024 Public Book p.25)
The Legislature followed suit in 2025 by enacting the
Climate Resilience Investment Act (CRIA). Current Treasurer Steiner, through CRIA, has committed to stay true to the intent of the Net Zero Plan. (Tracking Net Zero and Climate-Positive Investment Strategies p. 27 (2025))
CRIA imposes a new investment duty to actively look for emissions-lowering investments, and prefer them when fiduciary duties allow. CRIA says the OIC and Treasury will, subject to OPERF's fiduciary duties, "Actively analyze and manage the risks of climate change" to OPERF. As a means to that end, they "shall . . . pursue the goal of reducing the carbon intensity of the fund through a preference for investments that reduce net greenhouse gas emissions . . . ." (emphasis added)
Treasury described for the OIC an investment strategy that appears to be at odds with CRIA's mandate
Rather than actively looking for green investments, Treasury’s April 15, 2026 OPERF climate report to the OIC describes an unchanged investment practice—letting outside generalist investment managers do what they want, with no instructions to pursue and conditionally prefer green investments. Treasury’s report equated CRIA’s mandate to pursue green investments as a misguided “chasing a thematic ‘story.’” Treasury wrote:
“The growth in our climate-positive portfolio is driven by traditional energy managers finding superior value in green investments. These managers are not buying assets because they are green; they are buying them because they are mispriced opportunities that offer better returns than legacy assets . . . .
Broad-based managers apply strict, agnostic return criteria. They have the entire energy spectrum to choose from, so they only select a green investment if it truly competes with or beats a traditional alternative.
Result: We own ‘good investments that happen to be green,’ not ‘green investments that happen to be available.’
‘Green-only’ firms . . . may be forced to ‘pay up’ (overpay) for assets or overlook fundamental business risks because they are chasing a thematic ‘story.’
Our Protection: By using generalists, we avoid this ‘greenium’ inflation and maintain strict valuation discipline.” (OIC 4.15.26 public book p. 118)
Treasury appears to be assessing emissions-lowering investments in isolation, not within a new CRIA-required overall investment program
Fiduciary duties do not require any particular investment to have superior anticipated value to another investment that happens to cross an investment manager’s desk at the same time.
Instead, they first require all OPERF investments to meet risk and return objectives suitable for the long-term stability and viability of PERS, and after that to be as productive as possible—not in isolation, but within an overall investment program. (ORS 293.721 – General objective of investments; ORS 293.726(2); ORS 238.601 – Legislative findings and intent; White v. PERB)
Treasury’s report gives no indication it has constructed an overall investment program that advances CRIA’s new mandates. Instead, the report describes comparing the productivity of investment choices in isolation. Fiduciary duty disallows that.
Treasury’s blanket refusal to deal with any green-investment specialists is further evidence that CRIA mandates to pursue green investments have not changed Treasury’s investment methods. Instead of shunning green specialists, a CRIA-aligned Treasury would be embracing them as a potential investment source. Then, Treasury could simply say no to unqualified proposals, and yes to qualified ones.
Treasury is an outlier in concluding the market has priced in most climate risk
Treasury premises its insistence on receiving “better returns than legacy assets” on the certainty that climate risk is fully priced into today’s energy investment market. Treasury’s certainty is an outlier: A 2024 Stanford-MSCI survey found the world’s largest investors overwhelmingly believe that climate change will impact portfolios, but do not think climate risks are fully reflected in asset prices. (2024 INSTITUTIONAL INVESTOR SURVEY ON SUSTAINABILITY p. 4)
Economic evidence suggests that only climate transition risk–not the much more consequential physical and system-level risks of the future–are reflected in today’s market. (Dissecting climate risks: Are they reflected in stock prices? - ScienceDirect (2023); Rebonato et al., How does climate risk affect equity valuations? pp 6-7 (2024); Climate shocks or the death by a thousand cuts? The effect of climate change on the valuation of equity assets (2025)) (“Transition risks are a specific category of climate risk facing the business community. Transition risks result from the relative uncertainty created by the global shift towards a more sustainable, net-zero economy.)” (8/30/24 email with Subject: “Thoughts on Risk” from Treasurer Read to 3 Treasury officials, obtained via public records request)
In a 2023 presentation to its client the Los Angeles County public pension fund, OIC’s consultant Meketa agreed that only climate transition risk is currently priced into the market. (LACERA Board of Investment video beginning at 2:50:34 (11/8/2023))
OPERF history shows that misplaced certainty in market omniscience ignores emerging risks, with dire consequences
Misplaced certainty in a market omniscience can lead to ignoring severe emerging risks, with dire consequences. It most recently led to today’s severely depressed investments in commercial office properties–with 90% declines in value. Expert investment managers worked remotely for years while never pricing the risk of remote work into the value of office towers. (8/30/24 email with Subject:
“Thoughts on Risk” from Treasurer Read to 3 Treasury officials, obtained via public records request)
In 2008, a misplaced belief in market omniscience was instrumental in causing a global recession that resulted from securitized subprime mortgages–with pension funds significant customers for AAA misrated bonds. (
Ten Years of Evidence: Was Fraud a Force in the Financial Crisis? JOHN M. GRIFFIN pp. 5, 26) Former Federal Reserve chair Alan Greenspan eventually acknowledged his “shocked disbelief” at the extent to which the market underpriced risk from these “liar’s loan” investments. (House Committee of Government Oversight 10-2008-Greenspan testimony pp. 2, 3)
Climate change poses an emerging risk to permanent impairment of OPERF value and should be treated accordingly
The early stages of climate risk are far more identified, studied and analyzed than early stages of the two spectacularly embarrassing examples above. Given the risk to PERS stability and viability, Treasury’s overall investment program could prudently boost green investments by factoring an amount of climate-risk insurance value into them. (See Gosling,
Universal Owners and Climate Change p. 4 (2024)) Particularly when acting with others, these assets would align OPERF with a climate, economic and financial world that safeguards PERS, rather than one that steadily increases risks of hugely depressed values in a world fraught with economic damage.










