Merkley intros fossil fuel divestment legislation
Sen. Jeff Merkley, D-Ore., on Thursday introduced the Retirement Investments for a Sustainable Economy (RISE) Act, new fossil fuel divestment legislation.
The bill would create a new option for federal employees to put their retirement savings in funds that are free from investment in fossil fuel companies.
“As climate chaos ramps up, all Americans deserve the option to divest from the fossil fuel industry,” Merkley said in a news release. “For the first time, this bill will give millions of federal employees the power to ensure their retirement funds are invested in a more sustainable, socially responsible investment portfolio.”
In recent years, the fossil fuel divestment movement has rapidly expanded around the world. In January, New York City officials set a goal of divesting New York’s $189 billion in pension funds from fossil fuel companies within five years.
In July, Ireland became the world’s first country to fully divest from fossil fuels. Globally, almost 1,000 institutions have divested nearly $6.25 trillion from fossil fuels, and approximately 60,000 individuals have divested over $5 billion.
Additionally, multiple studies have shown that portfolios without fossil fuels have outperformed those with fossil fuels in recent years.
The RISE Act would create a Climate Choice stock option under the Thrift Savings Plan (TSP) that is free from investment in fossil fuel companies. While the TSP–the equivalent of a 401(k) for federal employees–currently offers investors options for the amount and risk allocation of their TSP accounts, it does not offer federal employees any control over the types of industries in which their money is invested.
As of July 2017, the TSP has approximately 5.1 million participants with approximately $510 billion in assets, and is the largest defined contribution plan in the world.
The RISE Act also mandates a report within one year from the Government Accountability Office (GAO) examining the risk for investors from TSP holdings in fossil fuel companies given policies to keep average global temperature increases to 2º Celsius. The RISE Act also directs the GAO to provide a divestment mechanism for the TSP should the report show risk to investors from fossil fuel holdings.
A one-pager summarizing the RISE Act can be found here.
