The bill aims to divest all funds managed by the state investment board from thermal coal, citing the environmental and health impacts of coal-fired electricity generation. It establishes a new framework for defining "thermal coal companies" and mandates that the state investment board cease new investments in such companies immediately, with a complete divestment by January 1, 2030. The bill also requires the state investment board to investigate its current investments for any exposure to thermal coal companies and to notify these companies of impending divestment.

Additionally, the bill allows for exceptions where the state investment board may retain investments in thermal coal companies that demonstrate a commitment to transitioning to clean energy within a reasonable timeline. The state investment board is tasked with monitoring these companies and reporting annually to the legislature on its divestment actions until all investments in thermal coal are eliminated. The definitions and guidelines for this process are based on established standards from the Urgewald organization and are intended to align with Washington's clean energy goals.