Thu, Feb 8, 2024 9:58 AM
By Tom Joyce, The Center Square
Oregon Treasurer Tobias Read unveiled a plan to transition the Oregon Public Employees Retirement Fund to a net-zero carbon emissions portfolio by 2050 this week.
The plan revealed the actions the Treasury plans to take in both the short- and long-term to meet its carbon reduction goals.
For example, to cut the portfolio's emissions by 60% by 2035, it will do the following, according to a press release from Read's office:
• Triple climate-positive investments in Private Equity and Real Assets from the current $2 billion to $6 billion by 2035
• Increase percentage of Public Equity holdings that are climate- or transition-aligned
• Exclude new investments in private market funds that have a stated intention to invest primarily in fossil fuels
• Increase the share of portfolio emissions covered by credible net-zero transition plans
“The impacts of climate change are being felt across the globe, including in Oregon. Planning and acting now to address the investment risks – and opportunities – of the climate crisis is a critical next step in making sure the pension fund will produce strong returns far into the future,” Read said. “This plan is a strategic roadmap that positions the pension plan for the future, and allows Treasury to continue to deliver sustainable returns for Oregon’s hard-working public employees.”
Governor Tina Kotek also expressed support for the plan.
“We know the climate crisis is already impacting Oregon, so we need to push with every innovation we can," Kotek said.
The OPERF was worth $93.8 billion as of last month, according to the release.
The Treasury will immediately implement parts of its plan. However, some parts need more work this year. Some things it will do this year include the following, according to the release, "conducting a carbon-intensive review of public portfolio holdings, establishing mechanisms for transparent reporting, and identifying the organizational capacity needed to accomplish the transition."
Daren Baskt, Director of the Center for Energy and Environment at the Competitive Enterprise Institute, thinks Oregon is making a mistake.
"Treasury should be serving the best interests of public employees and not the ideological agenda of climate extremists. But that’s exactly what it appears to be doing," Baskt told The Center Square. "If the Treasurer himself wants to invest his own personal money in specific causes, then he should feel free to do so. However, playing with public employees’ money and risking their retirements for some cause, whatever it might be, is irresponsible at best.
"Further, using the Retirement Fund to try and help eliminate fossil fuels and shift the country to unreliable and costly energy that isn’t capable of meeting basic needs isn’t some noble effort," he added. "It’s actually an arrogant plan that presumes government officials should push their climate agenda without regard for any of the costs and tradeoffs associated with their transition to energy poverty."
Treasurer Read presented the plan to the Oregon Investment Council at a meeting on Tuesday morning.
More information on the Treasury's investment plan is available here.