The Massachusetts legislature is considering a bill that would require the state’s pension fund to get rid of its investments in fossil fuel and thermal coal companies.
The bill calls for the state’s public pension funds to sell, redeem, divest, or withdraw all publicly traded securities of thermal coal companies by the end of the year, and fossil fuel companies by the end of 2020. It sets a fossil fuel divestment schedule that would require at least 33% of such investments be removed from the public fund’s assets under management before the end of 2018, 67% by the end of 2019, and 100% by year-end 2020. The bill also prohibits the acquisition of new assets of fossil fuel and thermal coal companies.
The bill (H-3281), which was introduced by State Rep. Marjorie Decker, defines fossil fuel companies as a company identified by a Global Industry Classification System in one of the following sectors: coal and consumable fuels, integrated oil and gas, and oil and gas exploration and production. It defines thermal coal as coal used to generate electricity—it does not refer to metallurgical coal or coking coal used to produce steel.
The bill also stipulates the creation of a commission to evaluate whether divestment from fossil fuels, not including thermal coal, creates any potential increased risk to the state’s pension funds and retirees.
The Massachusetts Pension Reserves Investment Management Board is charged with managing the pooled investment fund consisting of the assets of the State Employees’ and Teachers’ Retirement Systems, as well as the assets of local retirement systems under the control of the board.
A similar bill was introduced to the Massachusetts state legislature in 2014, but the legislature failed to act on it before the year’s session expired.