Thermal coal divestment/SIB

AN ACT Relating to the divestment of funds under management by 1
the state investment board from thermal coal; adding a new section to 2
chapter 43.21A RCW; adding new sections to chapter 43.33A RCW; and 3
creating a new section. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds that because burning 6
coal releases several carcinogenic toxins and pollutants, it is the 7
dirtiest way to produce electricity. It also finds that investments 8
in coal-fired resources contribute to climate change, damage the 9
environment, air, water, and soil, and disproportionately harm the 10
health of vulnerable populations and overburdened communities.11
The legislature further finds that Washington has committed to 12
decarbonizing its energy sector by requiring that each electric 13
utility eliminate coal-fired resources from its allocation of 14
electricity by December 31, 2025. To support the elimination of coal-15
fired electricity generation and protect ratepayers, the legislature 16
has required the utilities and transportation commission to 17
accelerate depreciation schedules for coal-fired resources owned by 18
investor-owned utilities by no later than the end of 2025.19
The legislature further finds that the state investment board 20
maintains investments in coal assets at a time when governments, 21
S-0729.1
SENATE BILL 5439
State of Washington 69th Legislature 2025 Regular Session
By Senators Frame, Lovelett, Hasegawa, Nobles, Ramos, Saldaña, and
Stanford
Read first time 01/22/25. Referred to Committee on Ways & Means.
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public pension funds, and institutional investors, including CalPERS, 1
CalSTRS, the New York state common retirement fund, the New York city 2
employees' retirement system, and the Oregon public employees 3
retirement fund have committed to divesting from coal. The 4
legislature further finds that the state investment board has 5
developed a climate blueprint to guide investment decisions that 6
impact and are impacted by climate change while fulfilling its 7
mission of maximizing returns at a prudent level of risk for the 8
benefit of beneficiaries. 9
Therefore, the legislature intends to protect public health and 10
the environment and align with Washington's clean energy goals by 11
divesting all funds under management by the state investment board 12
from thermal coal. 13
NEW SECTION. Sec. 2. A new section is added to chapter 43.21A 14
RCW to read as follows: 15
(1) The definition of "thermal coal company" under section 3 of 16
this act is based on definitions developed by the Urgewald 17
organization as they existed on January 1, 2025. 18
(2) Beginning January 1, 2030, the department must annually 19
review the definition of "thermal coal company" under section 3 of 20
this act as compared to the definition used by the Urgewald 21
organization at the time of the review and report meaningful changes 22
to the relevant environmental committees of the legislature, and the 23
legislature shall consider updating the definition of "thermal coal 24
company." 25
NEW SECTION. Sec. 3. A new section is added to chapter 43.33A 26
RCW to read as follows: 27
The definitions in this section apply throughout this chapter 28
unless the context clearly requires otherwise. 29
(1) "Clean energy" means both nonemitting electric generation and 30
electricity from renewable resources as described in RCW 19.405.020.31
(2) "Global coal exit list" means the list of coal industry 32
participants identified by the Urgewald organization.33
(3) "Subject investment funds" means all funds under management 34
by the state investment board. 35
(4) "Thermal coal company" means a company, or parent or 36
subsidiary of a company: 37
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(a) From the mining, power, and services sector that derives at 1
least 10 percent of its annual revenue from activities related to 2
thermal coal; 3
(b) From the utility sector that generates 10 percent or more of 4
its power from coal based on actual generation or installed capacity;5
(c) Whose annual thermal coal production is equal to or greater 6
than 10,000,000 tons of coal; 7
(d) Whose installed coal-fired capacity generation is equal to or 8
greater than five gigawatts; 9
(e) Planning to develop new coal-fired power capacity of at least 10
100 megawatts prorated; 11
(f) Engaged in coal exploration activities or planning to expand 12
their coal mines; or 13
(g) Involved in the development or expansion of coal 14
transportation assets or other infrastructure dedicated to support 15
coal extraction, transportation, and coal-to-gas facilities.16
NEW SECTION. Sec. 4. A new section is added to chapter 43.33A 17
RCW to read as follows: 18
Except as provided in section 6 of this act: 19
(1) Beginning on the effective date of this section, the state 20
investment board will not make new investments in any thermal coal 21
company, or any fund containing a thermal coal company.22
(2) By January 1, 2030, the state investment board must ensure 23
that moneys in subject investment funds are not invested in any 24
thermal coal company, or any fund containing a thermal coal company.25
(3) To the greatest extent practicable, divestment and 26
reinvestment of moneys in subject investment funds under this section 27
must be accomplished without monetary loss to the funds through 28
reasonable, prudent, and productive investments in companies 29
generating returns that are comparable to the returns generated by 30
the companies subject to divestment. 31
NEW SECTION. Sec. 5. A new section is added to chapter 43.33A 32
RCW to read as follows: 33
(1) The state investment board shall make reasonable efforts to 34
investigate all companies in which the state investment board has 35
invested or may invest moneys in subject investment funds to 36
determine whether any of those companies are thermal coal companies.37
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(2) If the state investment board determines that subject 1
investment funds are invested in a publicly traded company that is a 2
thermal coal company as defined in section 2 of this act, the state 3
investment board shall give notice to the company that the state 4
investment board will withdraw moneys in subject investment funds 5
that are invested in the company as long as the company is a thermal 6
coal company. 7
(3) The state investment board may use the global coal exit list 8
to identify thermal coal companies for the purpose of sections 3 9
through 6 of this act. 10
(4) The state investment board may consult with managers of 11
public employee pension funds in other states, including California, 12
Oregon, and New York, regarding thermal coal companies from which 13
those funds have been divested. 14
NEW SECTION. Sec. 6. A new section is added to chapter 43.33A 15
RCW to read as follows: 16
(1) The state investment board may retain an investment in a 17
thermal coal company if the company demonstrates that it is 18
transitioning to clean energy on a reasonable timeline.19
(2) The state investment board may adopt rules to define a 20
reasonable timeline for such a transition. The rules may reflect the 21
guidelines of the United Nations intergovernmental panel on climate 22
change regarding necessary decreases in greenhouse gas emissions.23
(3) The state investment board shall monitor thermal coal 24
companies transitioning to clean energy to ensure that they are on 25
track to meet emissions reduction targets. 26
NEW SECTION. Sec. 7. A new section is added to chapter 43.33A 27
RCW to read as follows: 28
The state investment board shall report to the legislature on 29
actions to divest from thermal coal companies pursuant to sections 3 30
through 6 of this act by December 15, 2025, and each year thereafter. 31
Annual reports must be made under this section until no moneys in 32
subject investment funds are invested in thermal coal companies. The 33
state investment board shall make reports under this section publicly 34
available on its website and may include the information in its 35
annual sustainability report. 36
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