In 2024, former Oregon state Treasurer Tobias Read unveiled a plan to make the state’s public employees retirement fund investments achieve net zero emissions by 2050. Last September, Gov. Tina Kotek signed into law the Climate Resilience Investment Act which directs the Oregon Treasury to pursue profitable clean energy investment opportunities and reduce fossil fuel holdings in the retirement fund, which is valued at more than $100 billion.
A new report released this week by the Oregon State Treasury details the progress Oregon is making to reduce the climate impact of its investment portfolio. It found, for example, a more than 50% decrease in the climate intensity of its investments between 2022 and 2023. Investments in renewable energy, EV charging, carbon credits and battery materials also doubled to $2.4 billion between January 2022 and June 30, 2025.
Oregon state Treasurer Elizabeth Steiner joins us to share more details and discuss the uncertainties lying ahead as the state tries to balance its pension system obligations with climate-cutting goals despite the Trump administration’s embrace of fossil fuels.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. In 2024, former Oregon state Treasurer Tobias Read unveiled a plan to make investments in the state’s public employees retirement fund, net zero emissions, by the year 2050. A report released this week by the Treasury details the progress the state is making towards that goal. It found a 50% year-to-year decrease in the climate intensity of its investments and a big increase in money put towards clean energy.
Elizabeth Steiner is Oregon’s current treasurer. She joins us now. It’s great to have you back on the show.
Elizabeth Steiner: It’s a pleasure, Dave.
Miller: I think we should start with some context in order to understand the report your office just put out. So can you explain the net zero plan put forward by your predecessor, Tobias Read?
Steiner: Sure, it had a couple of key components. The first is we wanted to increase our investments in climate-positive holdings, and you mentioned that we’ve done a good job with that. We’ve doubled, from the beginning of 2020 to now, our investments in climate positive. The second thing it said is that by 2035, we want to reduce our emissions intensity by 60% and then, as you said, get to net zero by 2050. And it details a bunch of different ways we can approach that goal, but those are really the key take-homes from it.
Miller: What kinds of specific investment changes followed from that plan? Even in the years before that plan was announced close to two years ago, what are the specific investment changes?
Steiner: So interestingly, the reduction in carbon intensity that we saw in the report, which is 50%, actually happened before that report was published. We only measured 2022 and 2023 for this report and that 50% reduction happened between the beginning of 2022 to the end of 2023.
Miller: That was a surprise to me.
Steiner: That was a surprise to us too, and it was a good surprise. And what it tells us is exactly what we’ve been saying to everyone, which is that the market is trending in this direction. So we are doing what we always do. We’re practicing what we like to call evidence-based investing. We’re looking hard at all the factors that affect companies’ profitability, both in the public and privately traded areas, and we’re trying to understand that so that we can make profitable investments.
Miller: What does portfolio emissions intensity mean? So this 50% year-over-year reduction sounds really impressive, but I don’t actually know how impressive it is because I don’t truly know what portfolio emissions intensity means.
Steiner: That’s a great question. Portfolio emissions intensity is this … We worked with S&P Global, a highly reliable firm with an excellent reputation who has a lot of experience analyzing the emissions intensity in portfolios. They go in and they look at everything in our portfolio, and they measure what their emissions are in a variety of different areas. Then they attribute a percentage of those emissions to us based on how much we own of the company. So, we don’t have the credit for getting to net zero at a company, although it helps us. We also don’t take the blame, as it were, if a company’s polluting a bunch because we’re taking a percentage based on how much we own. So that’s emissions intensity.
Miller: What are the most carbon intensive kinds of holdings among the many and the complicated PERS investments?
Steiner: Great question. The most carbon-intensive section of our portfolio is what’s called real assets. Real assets are buildings, windmill farms, solar, factories, office buildings and things like that. And we know that buildings are actually pretty high emitters. So the real assets portion of our portfolio has the highest emissions intensity. You mentioned earlier that we had a significant increase in our holdings in climate positive. That’s all focused in our real assets portfolio. And the good news is the return on those investments is extraordinarily high, much higher than the carbon intensive ones in that portfolio.
Miller: And so when you talk about those real assets, that’s different than a tiny percentage of ExxonMobil, an equity stake in a pure fossil fuels company or overwhelmingly a fossil fuels company?
Steiner: Yeah, I mean, if you think about, for example, how much we own – there’s an office building and we own 20% of it – that’s a lot of emissions potentially, right? If they’re not using clean energy sources, if they’re using concrete, which is a pretty high emitter, all those kinds of things can contribute. So it could well be because ExxonMobil has so many shares out there that we have a tiny, tiny fraction, but we own more if we’re looking at our real assets portfolio.
Miller: It’s interesting when you put it that way because when I’ve talked about or heard about divestment as both an economic reality and as a political hope in recent years, it has been divesting from places like ExxonMobil that I think has gotten the most attention. You’re not saying it’s not important, but that’s not the biggest way that you think the state can actually reduce its overall emphasis or money that is tied to CO2 going into the air.
Steiner: I think to some extent it’s a both/and. We certainly want to look at lowering our investments in fossil fuels because that’s what the market is telling us we have to do. Those will not be profitable in the relatively near future. So of course we need to reduce our holdings over time. And we need to look at every aspect of our portfolio. If we only look at our fossil fuel holdings, we actually don’t have a lot of room to decrease. We don’t have a significant amount of fossil fuel holdings, so we want to look at every place in our portfolio where we can reduce emissions intensity.
Miller: How much of the state’s portfolio overall is tied up with either fossil fuels specifically or companies that somehow, or entities that somehow, spew significant amounts of greenhouse gasses?
Steiner: I wish I could give you a good answer to that question, but I can’t. We don’t own a ton of … Fossil fuels – I’m going to hope that I’m getting this right – [are] 3%-ish of our holdings, maybe a little bit less. And the high emitters, I actually don’t know the answer and I’m not sure we measured that separately or got that information when we did the analysis.
Miller: What can you tell us about Oregon’s private equity investments and the connection that they have to high emitting companies or industries? This is an issue that’s gotten a lot of attention and a lot of Oregonians have questioned the state’s historical reliance on private equity as a major part of PERS. I guess I’m wondering how much of a black box it is both to you and to state level managers, and then to us as the public?
Steiner: Two very good questions. The first thing I’m gonna say is that our private equity portfolio actually has the lowest carbon intensity of any section of our investments. Now, there’s a good reason for that. Private equity, you may not know this, but 85% of companies with revenues of $100 million a year or more are private. So if we don’t invest in private equity, we’re missing out on enormous diversification opportunities. We’re missing out on investing in companies that are investing in clean energy technology, that are looking at new ways to do carbon sequestration, all sorts of things that I think all the people who are concerned about private equity and are also concerned about carbon intensity would think are a good thing to be investing in. And most of those are smaller companies that are private. So we want to diversify our portfolio by including private equity.
I agree – and I’ve said this publicly – that our private equity holdings got a little too high. We have, just in my first year in office, reduced from 28% of OPERF to 24%. So we’ve made substantial progress in just one year and we’re continuing to roost to get closer to the target. We’re still well within the range that the investment council sets for us, but we’re trying to get close to the target.
I would argue that we have a fair amount of transparency. We know what companies we’re holding in each of those private equity funds. S&P Global was able to look at that and measure emissions intensity, but we can’t disclose that to the public because of the contracts we have with our private equity managers.
Miller: OK, when you say transparency, meaning you have a lot of visibility at the state level, but the public can’t have that kind of visibility because of the rules set up by the companies that you’re investing with.
Steiner: That’s correct.
Miller: I want to turn to the broader economic world right now. You said that basically the reason this makes economic sense and fiduciary sense is that the fossil fuel intensive companies are gonna be less and less profitable going forward. So it just makes plain old financial sense to have less of an economic reliance on them or investing reliance on them.
I’m wondering how the Trump administration has affected this, because when you say that, that made a lot of sense to me in recent years. But at a time when the Trump administration is so hostile to clean energy and so committed to propping up the fossil fuel industry, I’m wondering how much of an effect that has on the way you think about domestic investments in these two different kinds of energy?
Steiner: That’s a great question. The first thing I would say is this ... The fund is invested as a 30-year in perpetuity fund. So we’re looking at today, 30 years from now, January 16 of 2056. And tomorrow, we’re going to be looking at January 17 of 2056. It’s a perpetually renewing 30-year fund. So while this particular four-year stretch may be hostile to renewable energy and pro fossil fuels, that doesn’t mean that’s going to be true in five or 10 or 15 years from now.
The market showed us, prior to the Trump administration, that it was favoring climate-positive investments. And that’s one of the reasons our portfolio emissions intensity dropped so much. Our investment team thinks, over time, looking at the long term – which is how we invest – that renewable energy, carbon sequestration, all the other kinds of things that help reduce the amount of carbon in our environment will be highly profitable investments.
Miller: Have you seen a major difference in domestic fossil fuel production, and investment returns, and everybody outside the U.S. this year, and the near-term projections for the next couple of years?
Steiner: It’s interesting because we are all familiar with the law of supply and demand, right? What we know right now is that gasoline prices are as low as they’ve been in years. Why? Because OPEC, which is the biggest oil producer, has increased supply. What we’re hearing anecdotally from domestic oil producers in areas like where they’re doing fracking or in Texas where they have wells, traditional wells, is that the cost, the price that they’re getting for their oil is dropping so much that they’re actually not as profitable as one would think they are.
So I understand that the current administration wants to support production of domestic oil, but I’m not sure that’s actually doing much good for the companies.
Miller: So we’ve been talking about the new report that your office just put out and the net zero plan that preceded it put forward by your predecessor. But there is a new law that you championed, the Climate Resilience Investment Act, that is now in place. So let’s just start with the basics there. What is that going to do?
Steiner: That law says three things. As a former legislator, I will tell you one of the reasons I like it is less than two pages long. Clean and simple bills are good. It tells us to do three things. The first is to always focus on our fiduciary responsibility. That has to be our line in the sand. We have to put fiduciary responsibility to grow the pension fund first.
Miller: You didn’t need a new law to tell you that.
Steiner: No, we did not.
Miller: You already need to do that.
Steiner: We did not, but we need to reassure people because of the second part. And the second part says in the context of your fiduciary responsibility, when you can, you should be thinking about climate-positive investing. And there were people who were concerned, understandably, that that meant that it was an automatic divestment mandate – it was not, we still hold fossil fuels [and] we likely will for a while – or that we wouldn’t invest in other high emissions companies. That is not true. We will always focus on what’s going to be best for the portfolio. And if we have a choice between two things that are equally likely to give us a positive return on our investment, we’re gonna pick the climate positive one. And the third thing is it requires reports every two years to the legislature, the first of which will come just about a year from now in January of 2027.
Miller: Meaning that the report that just came out this week, that’s not tied to this new law, that was a voluntary report tied to this other related but separate goal of net zero.
Steiner: That’s correct.
Miller: What happens if, for whatever reason, fossil fuel or high-emitting energy investments start doing better? If the reverse of what you just described becomes the status quo for some period, does that mean, based on what you’ve just said, that the state would then say, OK, then we will invest more in these companies because that will help all of the many, many public employers who would be on the hook for an even higher percentage of retirement costs going forward ... Is that the case?
Steiner: Yes, the reality is, of course, we would always be looking at long term projections, right? We’re not looking at one year or two years. Maybe we’re looking at five. We’re certainly looking at 10 year returns. We don’t day trade. We don’t flip stocks quickly. We certainly don’t flip private equity investments quickly. That’s not how they work. Most of what we do, we do over a long period of time. So if our team and our external consultants believe that investments in fossil fuels will make a significant positive impact, disproportionately positive impact on our portfolio, then yes, we’re gonna follow Sutton’s law. We’re gonna go where the money is.
Miller: In the time we have left, I’m just curious for a sort of a big picture question about your own philosophy and what the last year has taught you. You are a physician turned lawmaker, now turned state treasurer and a progressive lawmaker. Am I putting a word in your mouth? Would you describe yourself as a progressive lawmaker?
Steiner: I would argue that I’m socially progressive and fiscally conservative.
Miller: OK. I appreciate that distinction. I’m curious what becoming treasurer and focusing now in a kind of required fiduciary way on the bottom line, even if, as you just said, that means that you may have to do things more with private equity or fossil fuel companies in the future that you wish you wouldn’t … I’m curious how this has changed the way you think about the world, if it has?
Steiner: That’s a great question. Everything requires trade-offs, right? We can’t always have our cake and eat it too. And what I would say is this: one of the reasons I wanted to be treasurer is because as a family physician, I know that financial fitness, financial well-being is the underpinning of physical and psychological well-being. If you are struggling to make ends meet, you are not going to be as healthy. You are not gonna have as good a sleep. You’re not going to be in as good shape psychologically. So everything we do at Treasury is designed to help Oregonians either directly or indirectly build financial well-being, build financial fitness.
Miller: And the metaphor there extends to a fire department who’s paying retirement benefits to its former firefighters.
Steiner: Absolutely. Because in part, if we do better at OPERF, if we grow the pension fund well, that reduces the rate that that fire department has to pay in, which means they can hire more firefighters, which means that the stress, the mandatory overtime reduces. And the firefighters get their necessary rest. And people get their fires responded to faster. So there’s a direct downstream effect that is easy to track when we do well with our investment strategy.
Miller: Elizabeth Steiner, thanks very much.
Steiner: My pleasure. Thanks for inviting me.
Miller: Elizabeth Steiner is Oregon’s state treasurer.
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