(Washington, D.C.) – Today, U.S. Representatives Emanuel Cleaver, II (D-MO) and Rashida Tlaib (D-MI), along with Senator Jeff Merkley (D-OR), re-introduced the Restructuring Environmentally Sound Pensions in Order to Negate Disaster (RESPOND) Act. The legislation would require the Federal Retirement Thrift Investment Board (FRTIB) to conduct a thorough assessment to determine the extent to which federal workers’ pensions are exposed to climate-related financial risks.
The lack of a climate-related risk assessment leaves the pensions of millions of federal employees blindly vulnerable to the economic consequences of climate change, with the potential for catastrophic losses now and in the decades to come. If the Board finds these risks to be legitimate upon completion of its assessment, the bill would then require the Board to prepare and implement a strategy to transition the pension program’s holdings out of fossil fuel-related investments to better insulate retirement benefits from these risks.
In 2021, the GAO published a formal recommendation that the FRTIB conduct this analysis to ensure that federal pensions can be better protected from the growing financial risks posed by our changing climate.
“With more than 6 million federal workers across the country, including 38,000 across Missouri’s Fifth Congressional District, it is pivotal that Congress take steps to ensure that their well-earned pensions are not vulnerable to the current and future economic consequences of climate change,” said Congressman Cleaver. “Our RESPOND Act will require federal regulators to compile and analyze the data necessary to accurately assess climate-related risks to federal pensions. Such commonsense due diligence in the face of a worsening climate crisis will protect the retirements of federal workers nationwide, which is why I’m proud to introduce this legislation with Rep. Tlaib and Senator Merkley.”
“Federal workers should not be forced to invest their hard-earned savings in corporate polluters that are threatening our health, communities, and environment. The $700+ billion in retirement savings under federal management are a crucial opportunity to divest from fossil fuels that are killing our planet. Federal workers deserve real retirement security—based on both financial and environmental sustainability. I’m grateful to Rep. Cleaver and Sen. Merkley for leading this effort and look forward to working with them to pass this important bill,” said Congresswoman Tlaib.
“Some of the world’s largest and most sophisticated investors are divesting from fossil fuel projects because of the risk that they pose to investors’ bottom lines,” said Senator Merkley. “It’s time for the Thrift Savings Plan to explore whether millions of federal employees would be better off if their retirement funds are in a less risky and more sustainable, socially responsible portfolio.”
“Federal employees, like all Americans, should have the freedom to invest responsibly in ways that mitigate the systemic risks that the climate crisis poses to our economy and retirement savings. We thank Representative Cleaver for recognizing the serious financial risks associated with the climate crisis and taking action to protect workers from those risks,” said Ben Cushing, Fossil-Free Finance campaign director, Sierra Club.
“As the climate crisis continues to ravage our planet, and we experience 80 degree winter days right here in Missouri, it is vital that we invest our funds responsibly rather than waste money on outdated and unprofitable investments. The Sierra Club, Missouri Chapter, is proud to stand with Congressman Cleaver to protect the futures of federal workers,” said Gretchen Waddell Barwick, Sierra Club Missouri Chapter Director.
The FRTIB currently oversees $770 billion in retirement benefits for over 6 million federal employees, including 38,000 in Missouri’s Fifth Congressional District. The RESPOND ACT would take steps to protect these retirement benefits by:
- Commissioning the FRTIB to establish a “Federal Advisory Panel on Climate Change” to conduct a thorough examination of the financial risks posed by climate change to federal employee retirement benefits and report those findings to Congress.
- Instructing the FRTIB to immediately set a plan in place to divest from corporate polluters if the FRTIB determines that pension yields would be both financially profitable and consistent with fiduciary duties if divestment strategies were implemented.
- Implementing a “Climate-Choice” investment option to allow federal pension holders to opt into an investment plan that is completely divested from fossil fuels if the FRTIB is unable to make a conclusive determination on whether divestment strategies align with their fiduciary responsibilities to pensioners.
- Requiring the Federal Reserve and SEC to jointly issue annual reports on the financial risks of climate change to ensure the federal government is doing its due diligence to fully understand and account for these risks and costs in future projections.
The RESPOND Act is cosponsored by Reps. Earl Blumenauer (D-OR), Greg Casar (D-TX), Chuy García (D-IL), Barbara Lee (D-CA), Eleanor Holmes Norton (D-DC), Pramila Jayapal (D-WA), Ro Khanna (D-CA), Delia Ramirez (D-IL), Jan Schakowsky (D-IL), Juan Vargas (D-CA), and Bonnie Watson Coleman (D-NJ).
The RESPOND Act is endorsed by Sierra Club, Sierra Club Missouri Chapter, and the American Federation of Government Employees (AFGE).
Official text of the RESPOND Act is available here.
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