Report: State Has $5.3B Invested in Fossil Fuel Companies

Photo By Jim Evans (CC BY-SA 4.0) via Wikipedia
A oil rig refurbishment station in Corpus Christi Bay.

Environmental coalition asks for divestment, greater transparency.

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The Oregon State Treasury has at least $5.3 billion invested in fossil fuels, according to a report released this week by an environmental coalition calling for full divestment from the fossil fuels industry.

According to the report, which was released by Divest Oregon on Wednesday, the state’s investment in fossil fuels — including oil, coal and gas — exceeds the federal budget for energy efficiency and renewable energy in 2022 by $500 million.

The Treasury, led by Tobias Read, manages $140 billion of the state’s investment portfolio. Read is also a Democratic gubernatorial candidate who has publicly committed to fighting climate change.

But OST remains deeply invested in fossil fuel companies, with $1 billion invested in coal alone, the report says.

“OST’s investments support companies actively expanding fossil fuel infrastructure, from tar sands and gas pipelines to fracking wells and offshore drilling — even digging new coal mines and building new coal-fired power plants,” the report says. “They range from companies like American oil supermajors Chevron and ExxonMobil to energy-infrastructure companies like Kinder Morgan.”

The report goes on to note that the treasury also invests in banks, which “are the primary financiers of fossil fuels,” but that analyzing financial-sector investments is beyond the scope of the report.

The report’s authors recommend the state stop all new investments in fossil fuels; annually release a list of all portfolio holdings in every asset class; and phase out all current fossil fuel holdings and move to climate-safe investments.

“Fossil fuel investments do not align with Oregon’s political commitments, and they do not reflect the growth trajectory of the state’s economy,” the report says. “Over half of all energy sector jobs in Oregon are in clean energy. Job growth in this area is outpacing economy-wide job growth by over 60%. Jobs in clean energy also pay, on average, 20% more than jobs in other industries.”

Divest Oregon says it obtained the information used to compile the report via a public-records request.

House Bill 4115, which would have required the Treasury to disclose its investment assets and the climate-related risks those assets face, passed out of the Oregon House of Representatives in March but died in the Senate.

Last fall the Oregon Investment Council, a division of the Treasury, sent a letter to the Legislature touting the agency’s increased investment in renewable-energy stocks. But in that letter, council members — including Read — wrote that the council only considers exiting investments “for performance reasons, not political or personal ones.”

“We consider divestment an overly limiting tool, with potentially harmful impacts on long-term investment returns. It is also an ineffective tool for having real impact. Divestment would be an abdication of the OIC’s fiduciary obligations,” the letter says.

Divest Oregon’s report says a review of the Treasury’s fossil fuel investments found they actually didn’t perform as well as fossil fuel-free holdings.

The state is also in the process of divesting from Russian assets, which it is legally required to do due to federal sanctions. Those assets include some fossil fuel investments.

“We welcome continued dialogue with Oregonians on the best ways to address the risks of climate change while ensuring that we meet our mandate to produce sustainable returns for beneficiaries,” says a statement the Treasury issued to the media Wednesday. “We’re committed to a portfolio that reflects the realities of a changing climate, and a changing policy environment, while earning money for tens of thousands of Oregonians’ retirement security.”

Editor’s Note: An earlier version of this story inaccurately described the federal budget for renewable energy as an Oregon investment. Oregon Business regrets the error.

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