Hawaii 2023 Regular Session

Hawaii Senate Bill SB423

Introduced
1/20/23  

Caption

Relating To The Employees' Retirement System.

Impact

The bill sets forth a framework requiring the ERS to sell or divest from its holdings in fossil fuels over an unspecified timeline, which underscores a commitment to addressing environmental concerns and the detrimental effects of climate change. The statement asserts that continued investment in fossil fuels not only poses financial risks due to potential future policy shifts but also conflicts with Hawaii's goals of achieving a 100% renewable energy portfolio by 2045. This legislative move is anticipated to inspire other funds to consider similar divestment strategies.

Summary

SB423, introduced in the Hawaii Senate, aims to mandate the Employees' Retirement System (ERS) to divest its investment portfolio from coal, oil, and gas companies. The legislature emphasizes the need to disassociate the state's financial interests from the fossil fuel industry, highlighting the fiduciary responsibilities in light of global divestment trends among major investors, such as the Norwegian Sovereign Wealth Fund. This legislation is positioned as a proactive step in addressing climate change and aligning the state’s investment policies with sustainable practices.

Contention

Notable points of contention surrounding SB423 include the balance between safeguarding financial returns for retirees while adhering to environmentally responsible investment practices. Some stakeholders may argue that divesting from fossil fuels could impact the overall performance of the retirement fund or question the feasibility of a swift divestment schedule. Conversely, advocates of the bill contend that the risks associated with fossil fuel investments are increasing, thus making divestment a prudent and forward-thinking approach for the long-term sustainability of the retirement system.

Companion Bills

No companion bills found.

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