What is Divestment?


When you invest your money, you might buy stocks, bonds, or other assets that generate income for you. The Oregon State Treasury invests in the same way.

Most of the funds held by the Treasury are state employee retirement funds (PERS), invested for the long term to be available at the time of an employee’s retirement.

Divestment by the State of Oregon means ending new investment in the fossil fuel industry and phasing out existing fossil fuel investments over time. The money that is currently supporting the fossil fuel industry can be re-invested in a sustainable future for Oregonians.



Why should Oregon Divest?

The funds of PERS and the Oregon Treasury are at risk. Those funds should be put into climate-safe investments that increase our resiliency as a people and as a state.

It has been clear for years that institutions need to protect the returns of their pensions by divesting from fossil fuels. In the past decade, the data has been growing, and retirement funds have received a return on their fossil fuel investments that is below the market. With the 2022 war in Ukraine, the fossil fuel industry market has been more volatile than usual, but that doesn't change the big picture: the fossil fuel industry is a dying industry and investments in that sector will be evermore difficult to sell.

The urgency of the climate crisis demands that we act now. Only rapid and drastic reductions in greenhouse gases can prevent widespread devastation and extreme weather, and time is running out. A 2021 report from the International Energy Agency (IEA) issues a rock-solid conclusion: There can be no new fossil fuels in a net-zero by 2050 pathway (BankTrack 5/18/21), confirmed by the Intergovernmental Panel on Climate Change (IPCC) April 2022 report.

Simply stated, financial institutions must immediately halt all financing of fossil fuel expansion and phase out all fossil fuel holdings.

Read the report! "Risky Business: Oregon Treasury's Fossil Fuel Problem"

Additional Information

  • Who is in charge of the Oregon Treasury and how it’s invested?

    The Oregon Investment Council, with Treasurer Tobias Read at its helm, oversees all State of Oregon investments. Here are more details about the Treasury and Oregon Investment Council.

  • Divestment by the numbers

    The market size of the Retirement and Pension Plans industry in the US, measured by revenue, is $688.2 Billion in 2021.

  • Shouldn’t a pension fund be concerned exclusively with generating returns for beneficiaries?

    A pension fund has a fiduciary responsibility to manage the funds in its care. As the Treasury says: it “has a duty of exclusive loyalty to fund beneficiaries by ensuring that related monies are invested as efficiently and productively as possible while adhering to applicable standards of prudent judgment and care.” However, other standards are used as well: “The consideration of ESG factors within the investment decision-making framework is important in understanding the near-term and long-term impacts of investment decisions. The OIC believes that understanding how social and environmental factors impact investments is an important step towards building a more sustainable portfolio.” The Divest Oregon position is: the fossil fuel industry is no longer a prudent investment but instead is becoming more and more risky.

  • Shouldn’t a pension fund be cautiously investing for the long term and not trying to guess the market?

    Absolutely! But divesting isn’t guessing the market. Given that every investment is based on an interpretation of where the market is headed, a steady trend over a decade with every indication it will continue is solid evidence upon which to make investment decisions. Portfolios that exclude fossil fuels have outperformed portfolios that include fossil fuels for over a decade.

  • Isn’t it better for the Oregon Treasury to engage companies as a shareholder and to demand management decisions that align with climate goals?

    You are describing an engagement model of change. The Oregon Treasury calls on this model whenever they are challenged to divest. Engagement is too slow and too limited in its ability to change corporate practice; while it can have some effect, it isn’t enough to meet the crisis we are in. An added note: most shareholder votes are simply advisory.

  • Divesting sounds simple but isn’t it more complicated–aren’t there myriad investments that are connected to fossil fuels in varying degrees?

    You raise the good point that it can be very complicated to define just what investments should be dropped. However, if we could divest from all the clear sources of carbonization, we would be making huge progress! And this problem has been addressed and solved, well enough, by the institutions who have already divested well over $40 trillion in fossil fuel assets

  • Doesn’t “fossil fuel companies” include the energy companies that are leading the transition to renewables? Rather than divesting, shouldn’t we be enabling those companies?

    Energy companies are not necessarily fossil fuel companies, and one could define divestment to exclude those companies that are using green fuels such as solar. Also, our demands include: By 2026: Transparently phase out all CURRENT fossil fuel investments and move to climate-safe investments, using a social justice framework. We definitely want to enable companies leading a transition to renewables.

  • Why divest when so many companies are moving in the right direction already by investing in green/clean initiatives?

    There are two parts to this answer. First, many companies are working to present their efforts as meaningful change when they are not. This “greenwashing” is rampant and was recently acknowledged when an Exxon lobbyist was recorded talking about this strategy–but there are a myriad of examples. Second, there needs to be a rapid shift to NO further exploration for fossil fuels and radical shifts in use of fossil fuels–tar sands and methane particularly.

  • Even if one fund or institution dumps their fossil fuel shares, can’t they then be snapped up by other less climate-conscious investors?

    Yes, and this is a concern, with North Sea holdings as one example. And, looking at the big picture, most fossil fuel repositories are controlled by state governments that are not likely to be influenced by the divestment movement. But every entity that abandons fossil fuels as an investment influences the market. Our work is to educate investors that fossil fuels are no longer a good investment–and so drive down the price. We also work to undercut demand for fossil fuels by getting insurers to stop supporting fossil fuel infrastructure projects.

  • Over five years after the Paris Climate Agreement, financial institutions are still providing billions of dollars to fossil fuel companies. Doesn’t that indicate that divestment hasn’t worked?

    Divestment is a long term strategy. The fossil fuel industry is the architect of a massively-funded disinformation campaign that has spanned decades. It has enormous influence on federal and state governments, the Supreme Court, and Wall Street. The current perception of the oil industry has been influenced by divestment as well as by climate degradation and market forces. Our goal is essentially to keep the pressure on to make clear that fossil fuel holdings are both socially unacceptable and economically risky.

  • I’d like to divest my own money from fossil fuel companies as well. How can I do that?

    Use this guide: How to move your money.

Get details and read case studies in the "Risky Business: Oregon Treasury's Fossil Fuel Problem" report
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