Colorado HB 19-1270: PERA Public Employees' Retirement Association Board Assess Climate-related Financial Risks

Bill Text

First Regular Session
Seventy-second General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 19-0773.02 Nicole Myers x4326 HOUSE BILL 19-1270
House Committees Senate Committees
Finance
Appropriations
A BILL FOR AN ACT
CONCERNING A REQUIREMENT THAT THE BOARD OF TRUSTEES OF THE101
PUBLIC EMPLOYEES' RETIREMENT ASSOCIATION TAKE CERTAIN102
ACTIONS IN CONNECTION WITH CLIMATE-RELATED FINANCIAL103
RISKS TO THE VARIOUS TRUST FUNDS MANAGED BY THE104
ASSOCIATION.105
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
The bill requires the board of trustees (board) of the public
employees' retirement association (PERA) to retain an organization with
HOUSE SPONSORSHIP
Sirota and Hansen,
SENATE SPONSORSHIP
(None),
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute.

experience in public sector pension plans to conduct a study to analyze
any climate-related financial risk to the total assets of PERA (fund). The
board is required to administer a competitive selection process to solicit
unbiased and independent third-party organizations with the necessary
credentials to bid for the study and to enter into a contract with the
selected organization.
The organization selected by the board is required to include the
following in its study:
! A comprehensive analysis of the climate-related financial
risk of PERA's portfolio and the exposure of the fund to
long-term risks;
! A summary of climate-related financial risk-related
engagement activities undertaken; and
! A description of additional action that should be taken, or
planned to be taken, by the board to address climate-related
financial risk, including a list of proxy votes and
shareholder proposals initiated by the board.
The board is required to deliver a report to the general assembly
detailing the findings of the organization's analysis.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 24-51-222 as2
follows:3
24-51-222. Climate-related financial risk analysis - definition.4
(1) THE BOARD SHALL RETAIN AN ORGANIZATION WITH EXPERIENCE IN5
PUBLIC SECTOR PENSION PLANS TO CONDUCT A STUDY AS SPECIFIED IN6
SUBSECTION (2) OF THIS SECTION. THE BOARD SHALL ADMINISTER A7
COMPETITIVE SELECTION PROCESS AND SOLICIT INDEPENDENT8
THIRD-PARTY ORGANIZATIONS WITH THE NECESSARY CREDENTIALS TO BID9
FOR THE STUDY. THE BOARD SHALL SELECT AN ORGANIZATION THAT HAS10
A HISTORY OF UNBIASED RESULTS AND SHALL NOT SELECT AN11
ORGANIZATION THAT HAS A KNOWN CONFLICT OF INTEREST THAT MAY12
INTERFERE WITH ITS ABILITY TO PRODUCE AN OBJECTIVE REPORT. ANY13
ORGANIZATION THAT RESPONDS TO THE COMPETITIVE SOLICITATION SHALL14
HB19-1270-2-

DISCLOSE ANY ASSOCIATION THAT IT HAD OR CURRENTLY HAS WITH ANY1
PUBLICLY TRADED FOSSIL FUEL CORPORATION OR COMPANY, OR ANY2
SUBSIDIARY, AFFILIATE, OR PARENT OF ANY SUCH CORPORATION OR3
COMPANY. THE BOARD SHALL ENTER INTO A CONTRACT WITH THE4
SELECTED ORGANIZATION BY OCTOBER 31, 2019.5
(2) THE ORGANIZATION SELECTED PURSUANT TO SUBSECTION (1)6
OF THIS SECTION SHALL INCLUDE THE FOLLOWING IN ITS STUDY:7
(a) A COMPREHENSIVE ANALYSIS OF THE CLIMATE-RELATED8
FINANCIAL RISK OF THE ASSOCIATION'S PORTFOLIO AND THE EXPOSURE OF9
THE FUND TO LONG-TERM RISKS;10
(b) A SUMMARY OF CLIMATE-RELATED FINANCIAL RISK-RELATED11
ENGAGEMENT ACTIVITIES UNDERTAKEN; AND12
(c) A DESCRIPTION OF ADDITIONAL ACTION THAT SHOULD BE13
TAKEN, OR PLANNED TO BE TAKEN, BY THE BOARD TO ADDRESS14
CLIMATE-RELATED FINANCIAL RISK, INCLUDING A LIST OF PROXY VOTES15
AND SHAREHOLDER PROPOSALS INITIATED BY THE BOARD.16
(3) ON OR BEFORE JULY 15, 2020, THE BOARD SHALL DELIVER A17
REPORT TO THE GENERAL ASSEMBLY DETAILING THE RESULTS OF THE18
SELECTED ORGANIZATION'S FINDINGS FROM THE STUDY CONDUCTED19
PURSUANT TO SUBSECTION (2) OF THIS SECTION.20
(4) FOR PURPOSES OF THIS SECTION, "CLIMATE-RELATED21
FINANCIAL RISK" MEANS RISK THAT MAY INCLUDE MATERIAL FINANCIAL22
RISK POSED TO THE FUND BY THE EFFECTS OF THE CHANGING CLIMATE,23
SUCH AS INTENSE STORMS, RISING SEA LEVELS, HIGHER GLOBAL24
TEMPERATURES, ECONOMIC DAMAGES FROM CARBON EMISSIONS, AND25
OTHER FINANCIAL AND TRANSITION RISKS DUE TO PUBLIC POLICIES TO26
ADDRESS CLIMATE CHANGE, SHIFTING CONSUMER ATTITUDES, AND27
HB19-1270-3-

CHANGING ECONOMICS OF TRADITIONAL CARBON-INTENSE INDUSTRIES.1
SECTION 2. Safety clause. The general assembly hereby finds,2
determines, and declares that this act is necessary for the immediate3
preservation of the public peace, health, and safety.4
HB19-1270-4-