May 8, 2017

State Lawmakers Urged to Divest NY’s Pension Funds from Fossil Fuels

Albany, NY — Citing the need for state leadership on climate during the Trump presidency, advocates, elected officials and business people called upon the State Legislature to divest the state pension fund from fossil fuel companies that are driving global warming.

State Comptroller Tom DiNapoli, the sole trustee of the pension fund, has said that at least $5 billion is invested in various fossil fuel companies, including a billion dollars in Exxon. Exxon is presently under investigation by NYS Attorney General Eric Schneiderman for its role in funding climate deniers even though its own scientists were warning the company about the reality of global warming.

“Climate change is very real and is hurting New York.  We’ve had superstorms, catastrophic flooding with record heatwaves caused by a warming planet,” Assistant Speaker Felix W. Ortiz said. “While the President and his Administration call climate change a hoax, New York can set the example for changing climate change policy. The first step should be to divest public pension funds from fossil fuel companies”.

Since first proposed divesting the New York State Common Retirement Fund from fossil fuels 4 years ago, the decision not to divest has cost the fund at least $5.3 billion, according to a report from Corporate Knights, an investment research company. Other institutions worldwide have divested more from more than $5 trillion in funds since the campaign started.

“In the face of Donald Trump’s climate denial, it is up to states like New York to use absolutely every tool in our arsenal to stave off climate catastrophe. Fossil fuel divestment sends a powerful message that it is unacceptable to invest in companies whose fundamental business model requires the destabilization of our climate and our society. Investment experts increasingly recognize that divestment is not only morally imperative, but financially prudent, and necessary to maintaining portfolio value for pension beneficiaries during the coming clean-energy transition. For the sake of ourselves, our children, and our grandchildren, I urge my colleagues in the Legislature to sign on to this important bill,” said Sen. Liz Krueger.

Ortiz and Sen. Krueger are the lead sponsors of the legislation (A3712 / S4596) that would require the state to divest from the 200 largest fossil fuel companies within five years (one year for coal). The bill does allow the Comptroller to halt the divestment if he can show that it has had a negative impact on the value of holdings.

“It makes no sense for workers and the state to invest in companies that threaten our very existence. We need to halt the emissions of greenhouse gases immediately. It is immoral for the state to seek from profit from the destruction of our quality of life. With climate deniers in charge of the federal government, we need our state legislators and State Comptroller to show that they will step up and take action,” said Mark Dunlea with Divest NY, noting that hundreds of thousands of Americans marched nationwide on April 29 calling for increased governmental action on climate change.

The Intergovernmental Panel on Climate Change (IPCC) has released multiple reports that find climate change is causing dangerous and costly disruption of human and natural systems including the melting of Arctic ice, a rise in ocean acidity, a rise in global mean surface temperatures, the retreat of glaciers, an increase in extreme storm events, drought, increasing threat to global water and food supplies, loss of biodiversity and increasing risk of civil hardship, warfare and refugee dislocation.  

The State has a fiduciary responsibility to protect the retirement funds of public workers from risky investments. Investing in fossil fuels poses increasing financial risk and loss to the CRF, thus its beneficiaries. Falling coal and oil prices, along with renewables now becoming cheaper than burning greenhouse gases, highlights the financial case for rapid divestment.  Investors are increasingly voicing their concerns about the fossil fuel industry’s long term financial viability, and opposing new capital expenditures aimed at discovering new coal, oil and gas reserves. Investors are concerned about the increasing action by governments’ worldwide to restrict and tax the use of fossil fuels.

“It’s about time the NYS Comptroller starts divesting its nearly $10 billion investments in fossil fuel companies. There exists a firm political resistance in the Albany area to getting governmental buildings off of fossil fuels and going to solar/renewable energy. For example the Albany County administration has recently refused to install a solar array on the roof of the reconstructed County Nursing home even after a resolution that passed by the County Legislature! The Comptroller has a real chance to send a message against this resistance by initiating divestment from our dependence on fossil fuels which contribute to global warming and climate change,” said Doug Bullock, Albany County Legislator and a retired state worker.

“It is time for the city and state to take significant responsibility in the transition from the fossil fuel economy and lead the world towards a renewable energy economy. As business leaders we see how climate change impacts our businesses and communities, and we believe that New York’s pension funds must fully divest from fossil fuels and invest in sustainable solutions for a prosperous future,” said Ajax Greene, chair, New York State Sustainable Business Council.

The State Comptroller has resisted divestment, arguing for shareholder advocacy instead despite a half century of failure of such efforts. Shareholder advocacy is not an effective tool for changing the overall orientation of industries whose business models depend on producing fossil fuels.

There are now index funds available that exclude fossil fuels.

“When a pipeline was planned for Rensselaer County, we organized, we fought the pipeline and we won! Now we know that global warming is reaching a crisis stage and that all pipelines must be stopped so we have joined the fight for New York to divest from dangerous fossil fuels that cause climate disaster and instead invest in renewable, sustainable energy,” said Ruth Foster, Board member, Stop NY Fracked Gas Pipeline.

Since launched the divestment movement 4 years ago, more than 700 institutions worldwide have divested more than $5.1 trillion dollars from fossil fuels.  Institutions in NYS that have committed to divesting include the NYC pension funds (coal), Ithaca, Riverside Church, Amalgamated Bank, the American Museum of Natural History, Barnard College, Columbia University, Cooperstown, Metropolitan New York Synod, Evangelical Lutheran Church in America, New York Conference of The United Methodist Church, Union Theological Seminary, New York City, Rockefeller Brothers Fund, Ithaca NY, First Unitarian Church of Rochester, NY , Park Foundation – New School, Syracuse University.

Several dozen climate change activists were at the Capitol to help kick off NY events for the Global Divestment Mobilization. Hundreds of events are taking place worldwide from May 5 to intensify the demand for individuals and institutions to divest from the companies most responsible for causing climate change.

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For More Information: Mark Dunlea, 518 860-3725