Vermont 2023-2024 Regular Session

Vermont House Bill H0197

Introduced

2/8/23

Refer

2/8/23

Caption

An act relating to divestment of State pension funds of investments in the fossil fuel industry

Impact

If passed, this bill is poised to alter Vermont's approach to environmental sustainability and fiscal responsibility within the realm of public pension management. By divesting from fossil fuels, the state aims to align its investment practices with broader climate goals and to mitigate financial risks associated with fossil fuel investments. This change will require the Vermont Pension Investment Commission not only to execute divestments but also to provide ongoing reports to legislative committees regarding their progress and strategies for compliance.

Summary

House Bill 0197 aims to initiate a significant shift in the investment strategy of Vermont's state pension funds by requiring the Vermont Pension Investment Commission to review its holdings in the fossil fuel industry. The bill mandates that the Commission assess the extent to which the Vermont State Employees' Retirement System, State Teachers' Retirement System, and Municipal Employees' Retirement System are currently invested in fossil fuels and to develop a divestment plan with a deadline set for December 31, 2030. Furthermore, the bill prohibits any new investments in fossil fuel companies from July 1, 2031, onward.

Contention

The proposed H0197 has sparked discussions regarding the balance between ethical investment practices and the potential financial ramifications for state pension fund performance. Proponents of the bill argue that divesting from fossil fuels is an ethical imperative that supports climate action and reduces the financial risks linked to climate change, while opponents express concerns that such divestments could undermine returns on pension funds. The anticipated debate will likely focus on the implications of divesting from well-established industries on the financial health of pension funds, weighing ethical considerations against economic pragmatism.