HCR51.DOC

WHEREAS, the State of Hawaii has a strong and necessary commitment to sustainability; and

WHEREAS, the State has set a goal to be the first state to meet 100 percent of its energy needs through renewable energy sources by 2045; and

WHEREAS, the State has also set a goal to meet 40 percent of its energy needs through renewable energy sources by 2030; and

WHEREAS, the University of Hawaii System, Hawaii's largest institution of higher learning and research, has adopted Executive Policy 4.202, which makes a commitment to carbon neutrality by 2050; and

WHEREAS, Hawaii is particularly vulnerable to the effects of global warming; and

WHEREAS, continued rising of sea levels caused by global warming threatens to erode state beaches and dramatically alter shorelines; and

WHEREAS, continued increases in ocean temperatures caused by global warming may cause irreversible harm to ocean ecosystems, including the widespread bleaching of coral and increased stress on native plants and animals; and

WHEREAS, higher average temperatures caused by global warming may also increase the incidence of heat-related illnesses, such as dengue fever and cholera; and

WHEREAS, global warming has also affected global weather patterns, leading to periods of drought and flooding worldwide, and to disruptions in tradewind and rainfall patterns in the State; and

WHEREAS, fossil fuel use is often cited by scientists as a primary driver of global warming; and

WHEREAS, many of the world's leaders have taken steps to curb fossil fuel use and global warming, exemplified in December 2015, when an international agreement was reached at the United Nations Climate Change Conference in Paris to limit global warming to below two degrees Celsius; and

WHEREAS, many countries have adopted, and will continue to adopt, laws that address climate change, evidenced by over 800 laws that presently address global climate change--nearly double the amount since 2009; and

WHEREAS, many of these laws, regulations, and restrictions regarding fossil fuel use will undoubtedly have effects on the value of coal, oil, and gas companies; and

WHEREAS, the value of fossil fuel stocks has already decreased by nearly one-third in the past two years; and

WHEREAS, the New York State Retirement Fund lost at least $5.3 billion from their investments in top coal, oil, and gas companies; and

WHEREAS, fossil fuel stock prices face further valuation concerns due to restrictions on fossil fuel reserve consumption set by international global warming goals adopted during the 2015 United Nations Climate Change Conference; and

WHEREAS, financial experts, including the Executive Director for Supervisory Risk and Regulatory Operations of the Bank of England, Paul Fisher; former United States Treasury Secretary, Hank Paulson; former Securities and Exchange Commissioner, Bevis Longstreth; and analysts at Citigroup, AXA Investment Managers, Goldman Sachs, Standard and Poor's, and HSBC have warned of a looming carbon financial bubble; and

WHEREAS, the declining value of fossil fuel stocks may pose an ongoing problem for investors, given the global push toward renewable energy; and

WHEREAS, two of the largest pension funds in the nation, California's CalPERS and CALSTRS, have divested from holdings in coal mining companies in response to legislation adopted by the California State Legislature; and

WHEREAS, even oil-rich countries, such as Saudi Arabia, are switching investments into renewable energy; and

WHEREAS, to maintain the State's commitment to its citizens, the State should invest in only renewable energy technologies; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-ninth Legislature of the State of Hawaii, Regular Session of 2017, the Senate concurring, that the Board of Trustees of the Employees' Retirement System, working in conjunction with a reputable investment consulting firm with experience in managing fossil fuel-free portfolios, is urged to assess the impact of fossil fuel investments on the Employees' Retirement System's portfolio; and

BE IT FURTHER RESOLVED that the Board of Trustees of the Employees' Retirement System prepare and submit a report to the Legislature, prior to the convening of the Regular Session of 2018, assessing the impact on the Employees' Retirement System's portfolio of fossil fuel investments over the past one, three, and five years, and quantify the losses and gains incurred by such investments in comparison to the portfolio rebalanced with those investments distributed in other sectors; and

BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Chair of the Board of Trustees of the Employees' Retirement System.

	OFFERED BY:	_____________________________

Report Title:

Employees' Retirement System; portfolio of fossil fuel investments

HOUSE OF REPRESENTATIVES	H.C.R. NO.	51
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII