Maine has become the first US state to adopt legislation which will divest public assets from fossil fuels.
The “groundbreaking” law places the 200 largest listed oil and gas companies, and the 30 largest listed coal-fired power plant operators on a state investment blacklist, in addition to all companies deriving more than 50% of revenue from fossil fuel related businesses.
It further directs the Treasurer, who oversees state assets, and administrators of the $17bn Maine Public Employee Retirement System (MPERS) to carry out a stocktake of all current investments within the fossil fuel industry.
MPERS and other state funds will have until January 2026 to complete the divestment exercise. It is estimated that the former will need to divest a total of $1.3bn of its existing exposure to fossil fuels, including $850m invested through private equity vehicles.
“If Maine can divest responsibly and thoughtfully, there are no more excuses for any other pension fund and legislature in the USA,” said Richard Brooks, Climate Finance Director at Stand.earth, an environmental campaign group and coordinator of the US-focused Climate Safe Pensions Network. “It is past time for every other public pension to address the mounting climate risk in their portfolios by holding onto fossil fuel investments.”
The legislation was also backed by Maine Treasurer, Henry Beck, who said earlier this year that “my office’s support of this legislation is based on the belief that curbing climate change requires, in part, intentional government action, crafted with fiduciary obligations in mind”.
Maine is not the only state pushing legislation to curb exposures to fossil fuels. Similar bills have also been introduced in Democrat-controlled New Jersey, New York State, Maryland and Massachusetts.
At the same time, state Republicans have mobilised to shield fossil fuels, with lawmakers in Texas recently passing legislation to stop investments in firms that boycott fossil fuels. Similar bills are being considered by the North Dakota and Alaska legislatures. (Read RI’s feature on divestment legislation in the US here)
Separately, the Illinois Senate is due to vote on a “landmark” clean energy bill next week, which would shutter the state’s coal-fired power plants by 2025, expand the subsidies available for nuclear plants and increase funding to renewable energy projects.