104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0130 Introduced 1/17/2025, by Sen. Adriane Johnson SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-110.18 new Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the retirement systems established under the General Assembly, State Employees, State Universities, Downstate Teachers, or Judges Article of the Code and the Illinois State Board of Investment, prohibits direct investment of any additional pension assets in the stocks, securities, or other obligations of any fossil fuel company or any subsidiary, affiliate, or parent of a fossil fuel company. Provides that each board of trustees of a pension system shall ensure the pension system does not make further indirect investments unless, upon exercising due diligence, the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in fossil fuel companies. Requires pension system trustees to identify the pension system's holdings, whether directly or indirectly invested, including private investments. Requires pension system trustees to identify holdings that are invested in the stocks, securities, equities, fixed income, corporate bonds, prime commercial paper, or other obligations of fossil fuel companies. Requires pension systems to, in accordance with sound investment criteria and consistent with fiduciary obligations, divest any fossil fuel holdings, which must be completed by January 1, 2030. Requires pension systems to adopt an update to their written investment policies if necessary. Requires each pension system to disclose the analytic methods used, if any, in determining the climate-related financial risks posed by its fossil fuel investments (both publicly traded and private investments) and the results of the analysis. Sets forth provisions concerning definitions, de minimis exposure to fossil fuel securities, and annual reporting. Effective immediately. LRB104 03580 RPS 13604 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0130 Introduced 1/17/2025, by Sen. Adriane Johnson SYNOPSIS AS INTRODUCED: 40 ILCS 5/1-110.18 new 40 ILCS 5/1-110.18 new Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the retirement systems established under the General Assembly, State Employees, State Universities, Downstate Teachers, or Judges Article of the Code and the Illinois State Board of Investment, prohibits direct investment of any additional pension assets in the stocks, securities, or other obligations of any fossil fuel company or any subsidiary, affiliate, or parent of a fossil fuel company. Provides that each board of trustees of a pension system shall ensure the pension system does not make further indirect investments unless, upon exercising due diligence, the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in fossil fuel companies. Requires pension system trustees to identify the pension system's holdings, whether directly or indirectly invested, including private investments. Requires pension system trustees to identify holdings that are invested in the stocks, securities, equities, fixed income, corporate bonds, prime commercial paper, or other obligations of fossil fuel companies. Requires pension systems to, in accordance with sound investment criteria and consistent with fiduciary obligations, divest any fossil fuel holdings, which must be completed by January 1, 2030. Requires pension systems to adopt an update to their written investment policies if necessary. Requires each pension system to disclose the analytic methods used, if any, in determining the climate-related financial risks posed by its fossil fuel investments (both publicly traded and private investments) and the results of the analysis. Sets forth provisions concerning definitions, de minimis exposure to fossil fuel securities, and annual reporting. Effective immediately. LRB104 03580 RPS 13604 b LRB104 03580 RPS 13604 b A BILL FOR
104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0130 Introduced 1/17/2025, by Sen. Adriane Johnson SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-110.18 new 40 ILCS 5/1-110.18 new
40 ILCS 5/1-110.18 new
Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the retirement systems established under the General Assembly, State Employees, State Universities, Downstate Teachers, or Judges Article of the Code and the Illinois State Board of Investment, prohibits direct investment of any additional pension assets in the stocks, securities, or other obligations of any fossil fuel company or any subsidiary, affiliate, or parent of a fossil fuel company. Provides that each board of trustees of a pension system shall ensure the pension system does not make further indirect investments unless, upon exercising due diligence, the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in fossil fuel companies. Requires pension system trustees to identify the pension system's holdings, whether directly or indirectly invested, including private investments. Requires pension system trustees to identify holdings that are invested in the stocks, securities, equities, fixed income, corporate bonds, prime commercial paper, or other obligations of fossil fuel companies. Requires pension systems to, in accordance with sound investment criteria and consistent with fiduciary obligations, divest any fossil fuel holdings, which must be completed by January 1, 2030. Requires pension systems to adopt an update to their written investment policies if necessary. Requires each pension system to disclose the analytic methods used, if any, in determining the climate-related financial risks posed by its fossil fuel investments (both publicly traded and private investments) and the results of the analysis. Sets forth provisions concerning definitions, de minimis exposure to fossil fuel securities, and annual reporting. Effective immediately.
LRB104 03580 RPS 13604 b LRB104 03580 RPS 13604 b
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A BILL FOR
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1 AN ACT concerning public employee benefits.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. This Act may be referred to as the Fossil Fuel
5 Divestment Act.
6 Section 5. Findings. The General Assembly finds that:
7 (1) Climate change is a real and serious threat to the
8 health, welfare, and prosperity of all Illinoisans, now
9 and in the future. Scientific evidence indicates that
10 maintaining the status quo of fossil fuel energy
11 production will lead to catastrophic results.
12 (2) Continued investment in the fossil fuel industry
13 is counterproductive to the goals set forth in the Energy
14 Transition Act. That Act, passed by the Illinois General
15 Assembly and signed into law in 2021, commits the State to
16 phasing out carbon emissions from the energy and transport
17 sectors and requires Illinois to be 100% reliant on
18 renewable energy by 2050.
19 (3) The threats posed by climate change, and the
20 necessary transformation of the global energy system to
21 mitigate it, will have a serious negative impact on
22 investors whose assets are not aligned with the goal of
23 keeping the global average temperature increase below 1.5
104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0130 Introduced 1/17/2025, by Sen. Adriane Johnson SYNOPSIS AS INTRODUCED:
40 ILCS 5/1-110.18 new 40 ILCS 5/1-110.18 new
40 ILCS 5/1-110.18 new
Amends the General Provisions Article of the Illinois Pension Code. Provides that the amendatory Act may be referred to as the Fossil Fuel Divestment Act. With regard to the retirement systems established under the General Assembly, State Employees, State Universities, Downstate Teachers, or Judges Article of the Code and the Illinois State Board of Investment, prohibits direct investment of any additional pension assets in the stocks, securities, or other obligations of any fossil fuel company or any subsidiary, affiliate, or parent of a fossil fuel company. Provides that each board of trustees of a pension system shall ensure the pension system does not make further indirect investments unless, upon exercising due diligence, the board of trustees is satisfied that the investment vehicle is unlikely to have more than 2% of its assets invested in fossil fuel companies. Requires pension system trustees to identify the pension system's holdings, whether directly or indirectly invested, including private investments. Requires pension system trustees to identify holdings that are invested in the stocks, securities, equities, fixed income, corporate bonds, prime commercial paper, or other obligations of fossil fuel companies. Requires pension systems to, in accordance with sound investment criteria and consistent with fiduciary obligations, divest any fossil fuel holdings, which must be completed by January 1, 2030. Requires pension systems to adopt an update to their written investment policies if necessary. Requires each pension system to disclose the analytic methods used, if any, in determining the climate-related financial risks posed by its fossil fuel investments (both publicly traded and private investments) and the results of the analysis. Sets forth provisions concerning definitions, de minimis exposure to fossil fuel securities, and annual reporting. Effective immediately.
LRB104 03580 RPS 13604 b LRB104 03580 RPS 13604 b
LRB104 03580 RPS 13604 b
A BILL FOR
40 ILCS 5/1-110.18 new
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1 degrees Celsius.
2 (4) Continued investment in fossil fuel-related
3 industries poses unacceptable risk to the long-term
4 sustainability of State and local pension funds that are
5 under the State Treasurer's control; to the long-term
6 sustainability of $26,000,000,000 of the State's
7 investments, $17,000,000,000 in the programs established
8 pursuant to Section 529 of the Internal Revenue Code,
9 $12,000,000,000 of the Illinois Funds, $80,000,000 of the
10 Secure Choice Retirement Savings Programs, and $30,000,000
11 in the ABLE Account Program; and to the sustainability of
12 other Illinois municipal and county funds.
13 (5) Because the continued investment in fossil
14 fuel-related industries poses unacceptable risk to these
15 pension systems and State investments, those who hold
16 investment authority over these systems should divest from
17 fossil fuel companies and fossil fuel infrastructure. Such
18 entities are encouraged to invest in climate change
19 solutions where consistent with acceptable financial risk.
20 Section 10. The Illinois Pension Code is amended by adding
21 Section 1-110.18 as follows:
22 (40 ILCS 5/1-110.18 new)
23 Sec. 1-110.18. Fossil fuel investment prohibited.
24 (a) In this Section:
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1 "Fossil fuel" means coal, petroleum, natural gas, or any
2 derivative of coal, petroleum, or natural gas that is used for
3 fuel.
4 "Fossil fuel company" means any company, including any
5 subsidiary, affiliate, or parent of a company, that: (1) is
6 among the 200 publicly traded companies with the largest
7 fossil fuel reserves in the world; (2) is among the 30 largest
8 public company owners in the world of coal-fired power plants;
9 (3) has as its core business the construction or operation of
10 fossil fuel infrastructure; (4) has as its core business the
11 exploration, extraction, refining, processing, or distribution
12 of fossil fuels; or (5) receives more than 2% of its gross
13 revenue from companies that meet the definition under item
14 (1), (2), (3), or (4) of this definition.
15 "Fossil fuel infrastructure" means oil or gas wells; oil
16 or gas pipelines and refineries; oil, coal, or gas-fired power
17 plants; oil and gas storage tanks; fossil fuel export
18 terminals; and any other infrastructure used exclusively for
19 fossil fuels.
20 "Indirect investment" means a holding in an investment
21 vehicle, whether publicly or privately traded, that directly
22 or indirectly owns more than a 1% interest in one or more
23 individual fossil fuel companies.
24 "Pension system" means a pension fund or retirement system
25 established under Article 2, 14, 15, 16, or 18 or the Illinois
26 State Board of Investment.
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1 (b) Beginning on the effective date of this amendatory Act
2 of the 104th General Assembly, in accordance with sound
3 investment criteria and consistent with fiduciary obligations,
4 a pension system shall not directly invest any additional
5 pension assets in the stocks, securities, or other obligations
6 of any fossil fuel company or any subsidiary, affiliate, or
7 parent of any fossil fuel company. In addition, each board of
8 trustees of a pension system shall ensure the pension system
9 does not make further indirect investments unless, upon
10 exercising due diligence, the board of trustees is satisfied
11 that the investment vehicle is unlikely to have more than 2% of
12 its assets invested in fossil fuel companies. The board of
13 trustees of a pension system shall not invest in any prime
14 commercial paper or corporate bonds issued by a fossil fuel
15 company.
16 (c) Within 90 days after the effective date of this
17 amendatory Act of the 104th General Assembly, pension system
18 trustees shall identify the pension system's holdings, whether
19 directly or indirectly invested, including private
20 investments. The report shall identify holdings that are
21 invested in the stocks, securities, equities, fixed income,
22 corporate bonds, prime commercial paper, or other obligations
23 of fossil fuel companies. For directly invested assets, the
24 name and subject of the investment, the asset class,
25 acquisition dates, and its current value shall be identified.
26 For indirectly invested assets, including private investments,
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1 the name and subject of the investment, the name of the General
2 Partner, the investment vehicle, the initial date and amount
3 invested, the fee structure, liquidity restrictions, if any,
4 and the actual or anticipated exit date shall be disclosed.
5 Such information shall be submitted as a report to the General
6 Assembly and posted on each pension system's publicly
7 accessible website within 180 days after the effective date of
8 this amendatory Act of the 104th General Assembly. Such
9 reports shall be updated and posted quarterly thereafter.
10 (d)(1) The board of trustees of a pension system shall, in
11 accordance with sound investment criteria and consistent with
12 fiduciary obligations, divest any fossil fuel holdings.
13 Divestment pursuant to this subsection must be completed by
14 January 1, 2030. Nothing in this subsection precludes de
15 minimis exposure of any funds held by the board to the stocks,
16 securities, or other obligations of any fossil fuel company or
17 any subsidiary, affiliate, or parent of any fossil fuel
18 company.
19 (2) Except as otherwise provided, trustees of the
20 pension systems shall, in accordance with sound investment
21 criteria and consistent with fiduciary obligations, divest
22 any indirectly held investments no later than January 1,
23 2030. Funds held in any investment vehicle that imposes
24 liquidity restrictions shall be divested as soon as
25 fiscally responsible but no later than January 1, 2035.
26 Nothing in this subsection precludes de minimis exposure
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1 of any funds held by a pension system in the assets or
2 obligations described in this Section.
3 (3) In the period before divestment pursuant to
4 paragraphs (1) and (2), the pension system may sign
5 engagement letters or participate in shareholder
6 resolutions seeking an agreed-upon divestment of fossil
7 fuels from the pension system's holdings.
8 (4) Nothing in this Section precludes or limits the
9 exercise of shareholder engagement or proxy voting rights
10 as guaranteed by a pension system's de minimis holdings
11 following the pension system's divestment obligations
12 pursuant to this Section.
13 (e) Each board of trustees of a pension system that has
14 adopted a written investment policy under Section 1-113.6
15 shall adopt an update of its written investment policy, if
16 necessary, to meet the requirements of this Section. A copy of
17 the updated policy shall be filed with the Department of
18 Insurance within 30 days after its adoption.
19 (f)(1) Each pension system shall disclose the analytic
20 methods used, if any, in determining the climate-related
21 financial risks posed by its fossil fuel investments (both
22 publicly traded and private investments) and the results of
23 such analysis, including the alignment of each pension system
24 with the Paris Climate Agreement and the climate policy goals
25 that are included in the Energy Transition Act.
26 (2) Each pension system shall report its
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1 climate-related shareholder engagement activities and
2 outcomes. For publicly traded investments, the report must
3 also include a description of additional action taken, or
4 to be taken, by the board to address climate-related
5 financial risk. The pension system's proxy voting
6 guidelines and climate-related voting record for the year
7 must also be included in the report. For private
8 investments, fund managers must identify all efforts
9 undertaken to decarbonize an existing investment and must
10 further identify all efforts that will be taken to prevent
11 fossil fuel exposure through future private investments.
12 (3) Beginning January 1, 2026 and annually thereafter,
13 each pension system shall issue a report reviewing its
14 environmental, social, and governance investment policy.
15 The report must disclose commonly available environmental
16 performance metrics on the environmental effects of the
17 pension system's investments.
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