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Bill > SB0130


IL SB0130

IL SB0130
PEN CD-DIVEST FOSSIL FUELS


summary

Introduced
01/17/2025
In Committee
01/17/2025
Crossed Over
Passed
Dead

Introduced Session

104th General Assembly

Bill Summary

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.

AI Summary

This bill establishes the Fossil Fuel Divestment Act, which mandates significant changes to how Illinois pension systems invest their assets, with a focus on reducing and eventually eliminating investments in fossil fuel companies. The bill defines fossil fuel companies broadly, including those with large fossil fuel reserves, coal-fired power plants, or companies whose core business involves fossil fuel infrastructure or extraction. Beginning immediately, pension systems are prohibited from making new direct investments in fossil fuel companies and must limit indirect investments to vehicles with less than 2% fossil fuel holdings. By January 1, 2030, pension systems must completely divest from fossil fuel holdings, with some flexibility for investments with liquidity restrictions (which can be divested by January 1, 2035). The legislation requires pension system trustees to comprehensively identify and report their fossil fuel investments, including detailed information about both direct and indirect holdings. Additionally, the bill mandates annual reporting on climate-related financial risks, environmental performance metrics, and shareholder engagement activities. The underlying motivation, as stated in the bill's findings, is to address climate change, align investment strategies with Illinois' renewable energy goals, and mitigate potential long-term financial risks associated with fossil fuel investments.

Sponsors (13)

Last Action

Added as Co-Sponsor Sen. Javier L. Cervantes (on 04/11/2025)

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