State lawmakers in Oregon instruct the state retirement fund to tackle environmental risks associated with climate change

In a significant move towards addressing climate change, Oregon's legislators have passed a bill directing the state's public pension to implement a sustainable investing plan. This makes Oregon one of the first states to receive legislative backing for such a plan.

The bill, which was passed in 2024, encourages the state treasury to support the transition to a cleaner energy future in its management of about $101bn in the public employee pension fund. The legislation also directs the treasury to produce regular reports to the legislature and confirms its fiduciary responsibility to retirees.

The decision comes as pressure mounts on pension funds to take more account of climate change risks. Campaigners have been calling on trustees to make sustainable investment decisions and use their voting power to push companies they invest in to go green.

The Sierra Club, an environmental organisation, applauded Oregon's move, stating that Oregon's state pension fund was the first among its peers to receive legislative backing for its sustainable investing plan. The Sierra Club's report, published in February, ranked the Oregon state pension fund sixth out of 32 US state pension funds in terms of its response to the climate crisis.

Damon Motz-Story, director of the Sierra Club's Oregon chapter, noted that Oregon's communities are already preparing for and responding to extreme wildfires, a clear signal of the worsening climate crisis. Tim Miller, director of Oregon Business for Climate, added that the world is moving towards a carbon-free future, and it's not turning back, creating opportunities for innovation and growth for companies and investors who are able to adapt.

This move by Oregon follows similar initiatives by other states. In 2024, besides Oregon, states like California, New York, and Washington introduced sustainable investing plans for their state pensions. In the following years, states such as Illinois and New Jersey reintroduced similar plans or proposed comparable legislation.

However, the administration of US president Donald Trump plans to overturn a rule that allows pension funds to consider ESG factors when making investment decisions and exercising shareholder voting rights. This could potentially hinder the progress made by states like Oregon.

A bill requiring greenhouse gas emissions disclosures was also introduced in Colorado in January. Two bills have been reintroduced in New York's senate, requiring climate disclosure rules similar to those adopted by California in 2023.

State treasurer Elizabeth Steiner stated that the climate resilience investment act protects employee retirement funds by enabling Treasury's investments to take full advantage of the opportunities the clean energy transition creates.

As of June 20, 2025, this article remains a testament to Oregon's commitment to a sustainable future, setting a precedent for other states to follow.

State lawmakers in Oregon instruct the state retirement fund to tackle environmental risks associated with climate change