Divest Oregon introduced The Pause Act ( SB 681 ), with Chief Sponsor Oregon Senator Jeff Golden’s support, to enact a five-year moratorium on new or renewed Treasury investment in private fossil-fuel funds. Why The Pause Act? For the past 50 years, the finance sector has dangerously re-written the rules of the global economy, including here in Oregon. Wealth has been extracted from our communities while our greenhouse emissions skyrocket. At the leading edge of this transformation has been the aggressive expansion of the private investment sector, generally referred to as private equity, which has over a trillion dollars in fossil fuel investments. The Oregon PERS portfolio is heavily weighted to private investments, which make up approximately half of the fund. The Pause Act is based on a key provision in past Treasurer Read’s net zero plan – which recognizes that portfolio emissions cannot be meaningfully reduced without ending new investment in long-term private funds holding fossil fuels. In the year since Treasurer Read announced his plan, to the public’s knowledge there has been no constraint on new private fund investments in fossil fuels. The Pause Act introduces transparency by requiring reporting to the public on progress under the bill. Current Treasurer Steiner has made a commitment to emission reduction of the portfolio. The Pause Act highlights the need for urgency, reflecting the impact of the climate crisis on all Oregonians and on the PERS portfolio. Why The Pause Act has no path forward When Divest Oregon asked for amendment discussions on The Pause Act with Treasurer Steiner, she said she would focus only on the Treasury’s HB 2200. That bill proposes a goal of limited emission reduction and reporting, with no mention of private investments. The Chair of the Committee hearing SB 681 offered to work with all stakeholders toward a bill acceptable to all parties. Instead, the Treasury crafted two statements in opposition to The Pause Act, and so the bill died in committee despite an outpouring of public support. This support was captured in the article from Oregon Capitol Chronicle (March 20, 2025). What did the Treasury argue in opposition to the Pause Act… and what is the Divest Oregon response? The Treasury sent written opposition to The Pause Act to key legislators and union representatives that are on the Treasurer’s Beneficiary Advisory Committee. The pre-committee hearing Treasury statementandthe Divest Oregon response was distributed to the Treasury and to the recipients of the opposition statements. In a filed statement of opposition , the Treasury put forward arguments that are problematic. Divest Oregon has expressed these concerns to the Treasury as follows: While Treasury argues that SB 681 would limit diversification, SB 681 does not stop Treasury from having a diversified strategy. There is nothing in the bill that says Treasury should stop investing in private equity, real estate, or real assets – which are the major components of their private investments. Private investments are not always providing strong returns. Treasury’s testimony on returns compared private equity with public equity returns. That comparison was a selective misdirection. The Real Assets asset class, which are private investments, produces double the emissions intensity to the PERS portfolio than the Private Equity class, and yet those returns weren’t reported in their testimony. The Real Assets class actually has lower 5 & 10-year returns than Public Equity. (For more details, see the Divest Oregon full response to their testimony.)

In December 2024, the Oregon Treasury published their Oregon Net Zero Plan 2024 Annual Report . Kudos to Treasurer Read for creating a Net Zero Plan and publishing the 2024 annual report before leaving office. Treasurer Read’s strong statement that climate risk is financial risk is essential context for the report. Divest Oregon published this analysis of the 2024 annual report including the following sections: Transition Readiness Framework/Carbon Intensive Review Manager Activity/Private Investments ESG Integration/Forming Alliances and Engagement Investing in climate-focused funds Proxy Voting Stewardship and Universal Ownership Divest Oregon strongly recommends the following: The Treasury's report should be sent to all PERS beneficiaries and prominently displayed on the Treasury website. Stakeholder input should be solicited during the formulation of Treasury action in this sphere and before the publication of the next plan report.

“First-in-the-nation” Pause Act will protect Oregon retirees from private equity’s overexposure to fossil fuels

Few public pension fund trustees have adopted a plan to address the risk of climate change to their portfolio. Oregon should be applauded as one of them, yet how does Oregon’s proposed plan compare to the major net zero plans of other US public pension plans? Divest Oregon has just released a comprehensive and detailed Comparison of US Pension Funds' Net Zero Plans Report . It allows the Oregon Treasurer and the Oregon Investment Council (OIC) to see what other fiduciaries are planning, to adopt best practices, and to change OIC policy as needed. Climate change is moving fast, and the report should be used by Oregon PERS and all fiduciaries to move faster in implementing a strong plan.

The newly released 2024 Private Equity Climate Risks Scorecard & Report by our allies, Private Equity Stakeholder Project, Global Energy Monitor, and Americans for Financial Reform Education Fund, gives us new insight into private equity firms and OST investments in these secret funds. Twenty-one major private equity firms manage $6 trillion in assets – and two-thirds of the energy companies in their portfolios are invested in fossil fuels. Oregon state employees’ pension plan (PERS) invests in 11 of these 21 funds.

Above: Natural coastal area of the proposed Rio Grande LNG terminal. Credit: Dylan Baddour/ Inside Climate News Below: Artist Rendering of the Rio Grande LNG project (Photo: Business Wire , 11/21/2019)

A recent article in Chief Investment Officer reported that the University of California had solid returns mostly stemming from a fund that excludes tobacco and fossil fuel investments: The University of California’s endowment and pension fund each returned more than 12% for the fiscal year ending June 30, boosting the total asset value of the university’s investment portfolio by $16 billion to $180 billion. Some $1.3 billion of that $16 billion gain came from a single S&P 500 index fund—one which excludes tobacco and fossil fuel investments—that provided the portfolio with its single biggest investment gain. We assume the OIC and Treasury would be thrilled by these types of returns, given the drag that private investments are causing to the portfolio returns, and the continuing liquidity problems of private funds. UC invests where they have a strong conviction while fulfilling their fiduciary duty. The two are not mutually exclusive: “This past fiscal year was about investing only in what we fully understand and taking full advantage of low-fee index funds guided by what we call the UC Investments Way,” said UC CIO Jagdeep Singh Bachher in a statement. “It’s about simplicity and leveraging our scale to concentrate on areas where we have strong conviction.” Bachher added that he believes the U.S. and “its resilient economy and thriving innovation ecosystem … is the best place to invest,” and the UC system has backed that up by allocating approximately 75% of its portfolio to domestic investments. We look forward to seeing the OST swiftly shift a significant portion of OPERF to index funds that exclude fossil fuels and to end any consideration of new investments in private funds that are laden with fossil fuel assets, as described in the Treasurer’s Net-Zero Plan. Collectively the country has moved past climate denial. The Oregon Treasury and the Oregon Investment Council should not get mired in solution denial . The solutions for a healthier pension and planet are available now!

A recent Bloomberg article explains that Oregon PERS made critical energy flow to the Putin regime possible, by enabling an LNG terminal. How? A $500 million financial commitment made in 2020 with $209.3 million is still available for investment, even after Treasurer Read said he would “Stand with Ukraine” and OIC agreed to end all Russian investments. This long-term, locked-in commitment of funds is one of reasons Divest Oregon continues to question private investments – especially since they are often laden with risky fossil fuel companies. Private investments comprise over half of the PERS portfolio . Background: The Oregon Treasury committed $500 million to the Stonepeak Infrastructure Fund IV in 2020 . In fact, the Treasury has been investing in Stonepeak Infrastructure Funds since 2012 . The commitment to a private fund is a long-term one. Once that commitment is made, the Treasury can only exit that fund at a steep loss, and once the commitment is made, the Treasury had no say in specific investments by the fund managers. Bloomberg reported that pension funds, including Oregon, enable the largest Russian LNG export terminal to function. Stonepeak invested in Seapeak LLC, which provides ice-class carriers specifically designed to carry Russian LNG from the Arctic. The carriers are only used for this purpose and are essential to the gas terminal. The investment by pension funds enables critical revenue flow to the Putin regime. The Bloomberg article states: The California Public Employees’ Retirement System, known as CalPERS, is one of the investors in Stonepeak’s fund and it said in response to a Bloomberg query that it had already raised concerns with the general partner. ‘We believe that Russian investments pose a material risk to our long-term investment success and have taken actions, consistent with our fiduciary duty, to remove these assets from our portfolio,’ John Myers, chief of Calpers’ office of public affairs, said in a statement. ‘We will continue monitoring events to ensure our partners’ actions are consistent with our investment beliefs.’ The Washington State Investment Board, Oregon Public Employees Retirement Fund, New York State Common Retirement Fund and the Teachers’ Retirement System of the State of Illinois declined to comment. Divest Oregon asked the Oregon Investment Council in one of our many emails to them: Is this a responsible investment, or a material risk? There were no sanctions violated, but does this uphold the pledge to “Stand with Ukraine” made by Treasurer Read and backed by the Council? We also asked: Do the long term risks justify continued new investments in predominantly fossil fuel private funds? We request that the OIC insure that there are NO NEW investments in fossil fuel investments especially in the private investment or bonds/credit markets. Digging the hole deeper makes no sense when you are already over target allocations in these private investments. Image: A Russian ice-breaking LNG Carrier. Source: VCG/Visual China Group/Getty Images

At the June 15th national-level meeting of the American Association of University Professors (AAUP), delegates overwhelmingly approved a sweeping resolution demanding that state pension boards and other fund managers divest fossil fuels from their funds. AAUP Oregon, the state-level organization of the AAUP, is a member of the Divest Oregon coalition and a leading union voice for divestment in our state. Victor Reyes, AAUP Oregon’s executive director, responded: “Watching the resolution pass with such overwhelming support by AAUP members from across the United States filled me with pride and reinforced the importance of the work we are continuing to do in our state as members of the Divest Oregon coalition. Our members understand that there is no retirement in a destroyed environment, and I feel confident that public support for divesting from fossil fuels can only grow with these recent wins.” Now the resolution goes to the AAUP executive committee for ratification and to direct its implementation.