SOCAN Comments to the Oregon Investment Council on the Treasury’s Net Zero by 2050 Plan
Alan Journet Ph.D.
Cofacilitator
Southern Oregon Climate Action Now
7113 Griffin Lane
Jacksonville
OR87530-9342
[email protected]
541-301-4107
February 28th, 2024
Chair Samples and Members of the Oregon Investment Council
I write as cofacilitator of Southern Oregon Climate Action Now, an organization of some 2,000 Southern Oregonians who are concerned about the climate crisis and encourage state action to address it. As rural and coastal Southern Oregonians, we live on the frontlines of the warming, reducing snowpack, heatwaves, drought and the increasing wildfire risk that these trends conspire to produce. Because of this, we pay close attention to what is happening in Salem in terms of legislative proposals and agency actions.
Before commenting on the OPERS plan itself, I offer the perspective of a retired ecologist by way of suggesting that there seems overall to be an insufficient sense of urgency at the plight we globally and collectively are facing. I start by referring you to Figure 1 which depicts how the factors of average annual temperature and precipitation determine the global distribution of our natural ecosystems and the biodiversity they contain. The point to note here is that a temperature shift of as little as 5⁰C (about 9⁰F) is sufficient to adjust the climate where a given ecosystem exists currently outside the range that will support that ecosystem. While natural ecosystems assuredly have the capacity to exhibit range shift and follow climatic adjustments, the speed with which our current climate is changing exceeds that capacity for many species and systems. Thus, we are in danger of compromising the ongoing survival of many of these natural associations.
In Figures 2 and 3, I offer the USGS projections for temperature and precipitation for Oregon. In these graphs, the blue lines and shading represent the Shared Socioeconomic Pathway (SSP) 4.5 scenario, the orange line and shading represent the SSP 7.0 scenario and the red line and shading represent the SSP 8.5 scenario. The sequence is from least to greatest impact. These are discussed by Hausfather (2019). The higher values represent scenarios with greater emissions. Schaumann (2022), meanwhile, stated “RCP-8.5 is not only the arguably most popular climate change scenario, it is also often framed in a very specific manner: as the business-as-usual trajectory that humanity is on if no climate change policies are adopted.” If Oregon follows the temperature trend consistent with the recent past (Figure 3), a trend which seems to follow the SSP 8.5 trajectory, by the end of the century, annual temperatures will likely climb over 10⁰F (about 6⁰C) above the 1981-2010 average. Comparing this projection with Figure 1 suggests that Oregon’s natural ecosystems are likely to be severely compromised by the end of the century. Alder and Hostetler (2013), also indicate that the projected trend of increasing temperature is greater during summer months than winter months. Although the projected precipitation trend suggests little change overall (Figure 3), winters are likely to be wetter and summers drier. Combined with our increasing summer temperature and projections suggesting snowfall will decline, these future climate models should alarm anyone who is concerned about preserving Oregon’s natural ecosystems and the beauty they confer. When we consider also that our agriculture, forestry, and fisheries are influenced by the same variables, we should add to the population of the alarmed, those of us who eat.
The point of this narrative is to stress that we collectively face an alarming problem; we should all commit to doing whatever we can to avert the current climate trajectory and doing it urgently. Frankly, a plan that seeks net zero emissions by 2050 doesn’t meet the urgency that our current situation and projections demand.
I read with great interest the proposed Net Zero Plan by which the Treasury hopes to reach Net Zero emissions from its investments by 2050.
We are pleased, for example, that the Treasurer stated early on: “I believe we’re overexposed to investment risks from climate change” (OST 2024, P. 3). This concern we re-iterated: “It was clear to the Treasurer that the climate crisis overall and its potential impact on Treasury investments are not problems to be dealt with in the distant future but instead require more immediate attention and action…” (OST 2024, P. 17).
While there is much to applaud in this proposal, we judge there to be some shortcomings.
On the positive side:
We applaud the recognition of a need for net zero investments with a goal of: “net zero greenhouse gas emissions by 2050.” (OST 2024 P. 5). and an interim target of “60% reduction in emissions by 2035” (OST 2024, P. 3), though we suggest the dates are much later than the urgency of the climate crisis demands. In exploring the risks in the investment exposure, we learn of the conclusion that: “Unsurprisingly, the highest risks that we found were for investments in fossil fuels (coal, oil, and gas and fossil-based utilities)” OST (2024, P. 10). Furthermore, there is recognition that: “Downward pressure on market valuations can occur due to stranded assets — coal and oil that it is too expensive or too little in demand to justify extraction” (OST 2024, P. 11).
Additionally, we learn: “It was clear to the Treasurer that the climate crisis overall and its potential impact on Treasury investments are not problems to be dealt with in the distant future but instead require more immediate attention and action” (OST 2024, P. 17). We suggest, however, that the timeline proposed really doesn’t measure up to the call for ‘immediate action.’
A little later, we find: ““…the Treasurer emphasized the risk climate change poses to the long-term sustainability of our investments, and how addressing that clear financial risk is consistent with Oregon State Treasury’s and Oregon Investment Council’s fiduciary duties” (OST 2024, P. 21). This is an excellent summary statement of the issue, the urgency, and how responding appropriately comprises fiduciary responsibility (but see below).
In short, we are encouraged by Treasury’s recognition of the problem, but disappointed by the absence of a sense of urgency that seems to be acknowledged in several comments in the report.
Fiduciary Responsibility seems confused/confusing. We read and hear much about fiduciary responsibility, the implication being that a fiduciary must serve in the best financial interests of a client. We learn, for example, that the Treasury considers that: “Our fiduciary duty requires us to make investment decisions in the sole and best financial interest of beneficiaries of the Oregon Public Employees Retirement Fund (OST 2024, P.5).” However, my search for the meaning of ‘Fiduciary’ reveals the term refers to trust, not just financial trust. I found many statements such as the following (McCombs 2024): “A fiduciary duty, is the legal responsibility to act solely in the best interest of another party.” My underline for emphasis. This does not limit the responsibility just to a financial role, which raises the question as to whether investing in fossil fuels and promoting climate change serves the best interests of any Oregonians. It’s difficult for me to accept that this is the case such that investing in fossil fuels could reasonably be considered responsible investing.
To illustrate the above confusion, I quote (OST 2024, P. 17) “For the beneficiary outreach, it is helpful to note that Treasurer Read, members of the Oregon Investment Council, and Treasury investment staff are tasked by federal and state law to act in the best financial interests of beneficiaries of the funds we manage. Because of this fiduciary duty, an essential component of developing this plan was reaching out to the people with the most to gain and/or lose from our portfolio-related decisions: current and future retirees.” This statement certainly seems to focus on the financial aspects of fiduciary responsibility, but later (OST 2024, P 23), we learn “…investment staff have a fiduciary duty to act in the best interest of operf …” While the former statement stresses a financial obligation the latter opens the concept up to the broader term ‘best interest.’ That Treasury acknowledges that the concept implies ‘best interest’ rather than just a ‘financial’ obligation, is supported by their “reaching out to the people with the most to gain and/or lose from our portfolio-related decisions…(OST 2024, P. 17).” This effort revealed that “67% of respondents wanted Treasury to encourage the companies we invest in to consider the effects of climate change….” (OST 2024, P. 18). For this majority, I infer that ‘best interest’ implies more than simply maximizing financial benefits but includes undertaking investments within a sense of what invetors’ values are.
The confusion returns later: “….our mandate requires us to earn a rate of return sufficient to support the state’s obligations to beneficiaries.” This again seems to assume the fiduciary mandate is a financial requirement alone and declines to incorporate ‘best interests.’
Decarbonization is an unfortunate goal. For most of the discussion, the focus is on the critical word ‘carbonization.’ Thus, the plan as identified is to “Develop strategies to achieve net zero carbon emissions by 2050 or earlier” (OST 2024, P. 21). Although the following item regarding baseline assessment seems more accurate and realistic in stating: “Measure baseline greenhouse gas (GHG) emissions and set interim targets for managing climate risks and identifying opportunities for expanded investments in low-carbon solutions” (OST 2024, P. 21). The distinction is important. While carbon dioxide (CO2) and methane (CH4) both contain carbon, the carbon in methane is embodied in a molecule that, according to the latest Intergovernmental Panel on Climate Change Assessment Report 6 (Masson-Delmotte et al. 2021), on a pound for pound basis, is between 79.7 and 82.5 times worse than the carbon dioxide molecule as a warming agent on a 20-year basis and between 27.0 and 29.8 times worse on a 100-year basis. Meanwhile, nitrous oxide, which contains no carbon, is 273 times worse than carbon dioxide on both time scales.
The report then states under the heading NZE: “The Net Zero Emissions by 2050 Scenario7 (NZE Scenario) is a normative scenario that shows a pathway for the global energy sector to achieve net zero CO2 emissions by 2050, with advanced economies reaching net zero emissions in advance of others.” This, again, present a focus on just carbon dioxide, not even including methane, and certainly not nitrous oxide.
Curiously, it’s not until much later (OST 2024, P. 40) that the reader learns the metric under consideration for reduction is “Investment Intensity (tCO2e/$M AUM).” The appearance of tonnes of CO2e is encouraging since at last we realize that the goal is to assess all greenhouse gas emissions in from the investment portfolio in terms of the carbon dioxide equivalent of emissions per Millions of dollars of Assets Under Management. It would probably have been an improvement to include this clarification earlier in the document and define decarbonization in terms of tCO2e/$M AUM.
Appendix 4 then offers: “Decarbonization: The process of reducing or getting rid of carbon dioxide emissions, often from activities like making products or generating energy. In this report, it’s also used to reference the reduction of carbon emissions over time from assets held in the portfolio” (OTS 2024, Appendix 4). Within this report the definition of decarbonization clearly involves CO2e assessment. The glossary should reflect this.
The Goal of Divestment is to send a message. In relation to the value of divestment as a tool for stimulating meaningful change, Gethard (2022) pointed out that: “Protest divestment is a form of dissent in which stockholders intentionally sell their assets from a corporation to enact social change. By selling off stocks, protesters hope to influence corporations against performing some aspect of their business.” In relation to ending Apartheid in S. Africa, this author pointed out: “If enough corporations had stopped doing business in South Africa, its economy would have taken a turn for the worse, and that would have put the South African government in a major bind. Its choices became reforming its politics or risking complete and total economic isolation.” Thus, divestment became a critical tool for change. It is laudable to try to ‘work from within’ as Treasury suggests several times. For example, the plan suggests Treasury will “Require credible transition plans from companies or assets that derive > 20% revenues from thermal coal, oil sands, and shale oil and gas activities.” (OST 2024, P. 25). However, working from within and urging change needs to be accompanied by the threat that, absent appropriate change, divestment will follow.
Treasury defends its strategy of not divesting but using its seat at the table to engage in persuasion by arguing: “We are mindful that shifting an investment in a high emitting company into a low emitting company might lower the absolute GHG emissions of our portfolio, but it doesn’t necessarily translate into ‘real world’ GHG emissions, as it merely shifts the emissions ‘reductions’ into someone else’s emissions increase. ‘Real world’ emissions reductions would only occur if an asset made absolute reductions in its emissions – for example if a utility shifted from generating electricity using natural gas to solar generation.” (OST 2024, P. 24). Indeed, this is the case, but the goal of this effort is to follow the principles of divestment that lead to change in behavior.
It is laudable to: “Engage companies on their transition plans either directly or through stewardship coalitions.” (OST 2024, P. 45). However, such engagement should be accompanied by a clear promise that failure to do so will result in divestment.
By the same token, it is fine to: “Engage companies on their transition plans either directly or through stewardship coalitions”; “Increase active climate-positive investments”; “Switch passive investments to climate-aligned indexes”; “Increase engagement and stewardship activities with companies on net zero plans” etc (OTS 2024, P 49). But such efforts should be accompanied by the commitment to divest if progress is not made.
The absence of any serious pressure on those who hold Treasury investments to act as Treasury might urge is continued with: “As well as decarbonization opportunities, our investments in co-mingled funds provide opportunities to ask property managers to engage in decarbonization efforts” (OTS 2024, P. 58). In this context, the Section Reviewing “Public Equity Carbon Intensive Investments” (OTS 2024, P. 51) seems to lack an actual plan regarding what to do if invested entities don’t meet expectations.
In arguing against S. Africa divestment Harvard University President Bok (1984) claimed that the University had used its investments and shareholder role to persuade South African corporations to do the right thing, for example, by: “often voting to urge corporations to subscribe to the Sullivan Principles [Equal pay for all employees doing equal or comparable work for the same period of time].” While this may have nudged a few corporations, it did not undermine Apartheid. The evidence that the divestment campaign was the cause for ending Apartheid is probably best exemplified by Nelson Mandella visiting the UC Berkeley campus in 1990 to thank his “blood brothers and sisters” among the faculty and student body (Berkeley 2018). In the 1980s, the students were protesting to persuade the University of California to withdraw billions of dollars of investments in South Africa. It was divestment that turned the tide on Apartheid in S, Africa, not efforts involving maintaining investment while trying to persuade.
Scope 3 Emissions should be included. The Scope levels of emissions are identified by Bernoville (2022) as follows:
“Scope 1 emissions are direct emissions from company-owned and controlled resources.”
“Scope 2 emissions are indirect emissions from the generation of purchased energy, from a utility provider.” And
“Scope 3 emissions are all indirect emissions – not included in scope 2 – that occur in the value chain of the reporting company, including both upstream and downstream emissions.”
These are consistent with the report definitions (OST 2024, P. 82).
In the report, Treasury acknowledges that “Currently, emissions intensity will cover Scope 1 and 2 baselined emissions, which are the most reported and highest quality data and also where Treasury has the most influence. As the standards and reporting improve around Scope 3, Treasury will look to incorporate that data into our decision making” (OST 2024, P. 40).
The problem with this limitation was identified by Deloitte (2024): “For many businesses, Scope 3 emissions account for more than 70 percent of their carbon footprint. For example, for an organisation that manufactures products, there will often be significant carbon emissions from the extraction, manufacture and processing of the raw materials.” This suggests that for fossil fuel corporations, ignoring Scope 3 emissions will grossly underestimate their greenhouse gas emissions footprint.
This concern seems to be acknowledged in the Plan: “An initial screen of the emissions related to fossil fuel extraction estimates that they represent approximately 10% of the portfolio’s total emissions, while only representing 2.4% of OPERF’s total assets. Because we only looked at Scope 1 and Scope 2 emissions, we excluded integrated oil and gas companies from the estimates as most of their emissions are Scope 3. The largest portion of our financed emissions – estimated at 9.5% – comes from natural gas and oil extraction, most of which is within real assets.” This illustrates the problem with ignoring Scope 3 assessment. If Scope 3 is ignored, the entire effort is severely compromised.
It is encouraging that Treasury states: “As the standards and reporting improve around Scope 3, Treasury will look to incorporate that data into our decision making.” Greater credibility would be afforded if greater effort were expended to incorporate Scope 3 emissions especially from fossil fuel corporations.
The report also states (OTS 2024, p. 83): “Our emissions intensity measurement covers only Scopes 1 and 2 because Scope 3 emissions are complex and not widely disclosed. For example, in a recent study, shareholder representative As You Sow found that of 55 large companies only 20 disclosed all 15 types of Scope 3 emissions.”
“While the future of Scope 3 emissions requirements by the SEC continues to play out, European Union rules will make Scope 3 disclosures mandatory for large companies starting in 2024. The EU has also made reporting standardized.” This may be difficult but is not impossible and the evidence suggests that ignoring these produces a very inadequate assessment of emissions. Maybe Treasury could adopt a principle that they will not invest in entities that fail to disclose Scope 3 emissions in a credible manner.
Treasury defends this approach by arguing: “Most complete and reported data from companies today for credible progress reporting, [are] also where OST has the strongest influence.” While this is probably the case, it demonstrates why continuing to engage with corporations to try and ‘educate’ them is contra-indicated. Greater pressure is imposed by simply divesting.
Emissions Intensity hides rising total absolute emissions. During the discussion of metrics to be used in emissions accounting, Treasury indicates the possible use of Absolute Emissions and Emissions Intensity. While the former is straightforward, the latter is a little convoluted. Emissions Intensity is defined (OST 2024, P. 25) “as the amount of carbon dioxide emissions (CO2) released per unit of another economic output variable – such as gross domestic product (GDP) at the national level, or revenue, or number of employees at the company level. Using a carbon or emissions intensity measure allows companies to set emissions reduction targets that can account for economic growth.” This last acknowledgement reveals that a company can falsely claim they are reducing emissions (measured as emissions per unit product manufactured) when absolute emissions are rising since their productivity is increasing. If the goal is net zero of absolute emissions, employing emissions intensity has no place in the assessments.
We are encouraged to learn that: “To determine our emissions intensity numbers, the formula uses absolute emissions calculated through the baselining process. Absolute emissions can be highly correlated to the size of the portfolio.” This statement is unfortunately then confused by the rest of the same paragraph stating: “Emissions intensity, on the other hand, is a more consistent metric that gives our investment team a practical goal to work toward rather than just reducing portfolio size. It also allows for more meaningful comparisons of OPERF to itself over time regardless of the size of the portfolio and to other pension funds of different sizes.” This leaves the distinct impression that Treasury is willing to claim reduced emissions intensity per unit of production constitutes an emissions reduction even if the absolute emissions rise. If this is the case, the entire Treasury Net Zero venture will fall victim to accusations of being a greenwashing scam. This unfortunate impression is enhanced with the discussion of emissions intensity in relation to what other funds are doing (OST 2024, P. 37): “As the chart shows, most funds have set a 2050 target, with a 2030 interim target. Most have also set intensity-based targets rather than absolute metrics. Five funds have set net zero targets, while six have green finance targets.” (OST 2024, P. 39). Then again, we learn: “Currently, emissions intensity will cover Scope 1 and 2 baselined emissions, which are the most reported and highest quality data and also where Treasury has the most influence” (OST 2024, P. 40). These statements seem to support the contention that financial institutions and Treasury are greenwashing and constitute illusory efforts to address the climate crisis.
The focus on emissions intensity throughout the discussion of “Degree Of Decarbonization Difficulty – Economy & Asset Class” is disappointing since it again undermines the credibility of the plan and the stated commitment to produce absolute emissions reductions (OST 2024, P. 42). Disappointment continues, as we read: “It is important to recognize that we expect each asset class to reduce its individual emissions intensity by 60% by 2035; their ‘contributions’ are differentiated because of the different levels of emissions intensity within each asset class – higher in public equities, lower in private equity, for example.” (OTS 2024, P. 62). Regrettably, this rather confirms that Treasury has lost sight of the need for us to reduce absolute emissions and leaves us with a plan that quite likely will result in emissions increases from the portfolio as productivity increases.
This emphasis on emissions intensity stands in marked contrast to the earlier acknowledgement that: “Real world’ emissions reductions would only occur if an asset made absolute reductions in its emissions” (OST 2024, P. 24). It seems Treasury acknowledges the need to assess absolute emissions and achieve a reduction in these but paradoxically then focuses on the emissions intensity metric that can drop while absolute emissions rise.
Voluntarily reported data are unreliable. Treasury indicates that baseline data will be calculated using the Partnership for Carbon Accounting Financials (PCAF) methodology. Meanwhile, it is worth noting that NGOs are critical of this methodology (Marchant 2023). The author offers: “Alexis Normand, chief executive of Greenly, said: “The proposed compromise deal among banks to disclose carbon footprints of capital-markets operations is being hailed as a milestone in climate finance.”
Marchant continues: “However, voluntary standards led by industry players risk furthering the interest of a few banks over what’s needed to effectively tackle climate change. A more robust, comprehensive and stringent regulatory framework is needed to effectively tackle the climate crisis. This framework should enforce mandatory reporting of no-less-than 100% facilitated emissions, backed by scientific assessments and oversight.”
Given the history of misinformation and disinformation propounded by fossil fuel companies in their campaign to undermine public confidence in climate science, it seems naïve that an agency would rely on fossil fuel corporations contributing voluntary reporting of emissions.
Target reduction percentages could be more rigorous. Exhibiting laudable transparency, the discussion of Key actions and Strategies by Asset Class Treasury indicates an Interim 2035 target wherein Treasury commits to: “10% of active and 30% of passive investments to be climate- or transition-aligned” and that they will “Review investments that derive > 20% of revenues from thermal coal, oil sands and shale O&G by February, 2025” (OST 2024, P. 25). It would be interesting to know what is planned following this review, or if investments fail to display anticipated reduction. In relation to Private Equity and Real Assets, the report suggests the plan will: “Triple climate-positive investments”; achieve “65% of investments to be covered by credible net zero transition plans”; and will “Restrict new investments in funds primarily focused on fossil fuels.” (OST 2024, P. 25). There seems no justification offered for these percentages or multipliers, which – given the acknowledged urgency of the climate crisis and the need for immediate action to address it, leaves the reader wondering why they are not substantially more rigorous. It is also not clear why funds primarily focused (‘primarily’ is undefined) on fossil fuels are merely ‘restricted’ rather than ‘eliminated.’
Concluding Remarks
The report offers the methodology that they: “took four steps to calculate our portfolio emissions baseline” but it’s not clear what these steps were, so they cannot be evaluated.
We certainly approve the notion that Treasury will: “Restrict new investments in funds primarily focused on fossil fuels.” (OST 2024 P. 25) but would prefer the verb were ‘eliminate’ rather than ‘restrict.’
The steps indicated in the Essence of the Plan seem laudable: “First, Treasury will continue to evolve our portfolio, such as bringing active public equity investments in line with lower intensity benchmarks. Second, Treasury will increase the percentage of investments in companies or assets that have net zero transition plans through engagement and manager selection. Third, we will invest in climate-positive activities. These could include industries such as wind turbine manufacturing, energy storage solutions, and electric vehicles, or industries that will come to market over the next 20 years. Fourth, we will track changes in the portfolio as a result of the above actions and also consider potential exclusions or re-allocation” (OST 2024, P. 41). However, the question remains: why the delays when urgency is the criterion?
We are gratified to see the following statement, though it could have come earlier to allay fears that the entire Treasury effort was missing the point: “According to the IPCC’s glossary 10 of terms, net zero records the point at which emissions of greenhouse gases (GHGs) into the earth’s atmosphere from human activities are balanced by the reabsorption of GHGs through natural and enhanced storage methods over a specified period. Where more than one type of GHG is involved, the measurement of net zero emissions is more complicated and depends on the effect on the climate of the different types of GHG. For example, methane has a 100-year global warming potential 28-34 times that of carbon dioxide (CO2). Over a 20-year period, that ratio grows to 84-86 times that of CO2. Thus, net zero measurements must take into account these different global warming potentialities and the relevant time horizon.” (OTS 2024, P. 43). Although the reported global warming potential values are not quite consistent with what the IPCC identified in Assessment Report 6 (Masson-Delmotte 2021) as discussed above in the section on Decarbonization, they are close enough to suggest Treasury is concerned for recognition of the reality of those values.
By the same token, we are pleased to read: “It is anticipated that Treasury will continue transitioning the portfolio away from high carbon intensity sectors such as utilities, energy, and materials and into other lower intensity sectors like technology, consumer, and health care. Treasury’s net zero plan also establishes a goal of increasing the share of OPERF that is invested in climate solutions and green investments.” (OTS 2024, P. 54). This comprises an excellent plan with which we totally agree. As indicated above, we infer carbon refers to CO2e, but why not focus on absolute emissions rather than the illusion that reducing emissions intensity actually will result in absolute emissions reductions, and why not acknowledge the urgency and impose a faster schedule with deeper reductions?
We are somewhat bemused by the statement: “Finally, because of the carbon intensity of our existing real asset investments, Treasury will look for opportunities to evolve away from natural resource investments and toward lower intensity sectors like infrastructure and transition-enabling sectors” (OST 2024, P. 58). Maybe the meaning of ‘natural resources’ as used here refers to oil, coal and gas. If so, this would make sense. However, other natural resources (forests, for example) offer an excellent opportunity for Treasury to invest in natural climate solutions that will extract greenhouse gases (carbon dioxide) from the atmosphere.
We are very pleased that Treasury has acknowledged the investment risks associated with fossil fuel promotion and has developed a strategy to address it. We are, however, concerned about the points raised above. Most importantly, however, we are, with this and a multitude of other agency and legislative actions, extremely disturbed by the lack of alarm and urgency that proposed institutional responses repeatedly exhibit when they are represented as addressing the crisis.
It is encouraging that the plan acknowledges the risk of stranded assets: “We will also consider excluding investments that are exposed to stranded asset risk, such as fossil fuel companies without transition plans, and companies in ‘hard to abate’ sectors or industries. Stranded assets are those that lose value or turn into losses because they cannot be profited from.” (OTS, 2024, P. 67). We applaud this statement of recognition that fossil fuels are a dying industry.
Even if we were to adopt the view that Fiduciary responsibility only refers to the financial equation, we would be concerned that the Plan still promotes the unfortunate view that divesting from fossil fuels poses a financial risk to the portfolio: “Treasurer Read developed this Net Zero Plan to ensure the sustainability of pension fund returns by accelerating the reduction of carbon emissions in the OPERF portfolio, and to do so as aggressively as possible, without requiring a reduction in the anticipated capital market assumption of OPERF’s rate of return over the coming years” (OTS 2024, P. 69). Regrettably, this statement flies in the face of the evidence that demonstrates divesting from fossil fuel can result in a portfolio that provides greater economic returns. (e.g., Divest Oregon 2013).
The sum total of this analysis of the Net Zero Plan is that it fails to assure the emissions reduction in Treasury’s investment portfolio that is promised and seems not to recognize the urgency of concerted actions.
Respectfully submitted,
Alan R.P. Journet P.D.
Cofacilitator, Southern Oregon Climate Action Now
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