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Ahead of annual meeting and with time running out, DivestNY coalition amplifies call for full divestment now
On May 31, ExxonMobil shareholders will vote on a proposal led by NY State Comptroller Tom DiNapoli calling on the company to annually assess how its business will be affected by global efforts to limit climate change. Given the advanced stage of the climate crisis and Exxon’s long history of sowing disinformation to block meaningful climate action, the DivestNY coalition, which includes climate activists, financial experts, and foundations, is calling on DiNapoli to divest now.
“We don’t need Exxon to study how climate change is going to impact its profits, we need them to stop burning fossil fuels. Divest now before it’s too late,” said Mark Dunlea of PAUSE, a 350 affiliate.
DiNapoli manages the New York State’s Common Retirement Fund, the third largest pension fund in the country with more than $190 billion in assets. This is the second year in a row that he has co-filed the shareholder proposal, which is both voluntary and non-binding. Under the proposal’s terms, ExxonMobil “should analyze the impacts on [its] oil and gas reserves under a scenario in which reduction in demand results from carbon restrictions … consistent with the globally agreed upon 2 degree target.” This is also the second year in a row that Exxon has advised shareholders to vote against the proposal. Last year, ExxonMobil even sought to block a vote on the proposal.
“We know firsthand that shareholder activism is a losing strategy with Exxon. The company has a long history of talking the talk on climate change, while walking the other way. The notion that they are going to shift their core business in response to shareholder activism is naïve,” said Valerie Rockefeller Wayne, great-great-granddaughter of John D. Rockefeller Sr., founder of the Exxon’s parent company, Standard Oil.
“If Comptroller DiNapoli was serious about shifting Exxon’s dangerous business model, he would call on the company to put an immediate freeze on exploration for new fossil fuel reserves and return that value to to shareholders. Short of that, he should divest,” said Ellen Dorsey, Executive Director of the Wallace Global Fund.
As of 2015, The New York State pension fund had an estimated $12.5 billion, 7% of the total, invested in all fossil fuel companies. ExxonMobil is the Fund’s third largest company holding. A March 2016 report found that the Fund would have had an additional $5.3 billion to give to its retired employees if it had divested from fossil fuel companies and put that money into clean energy instead. That loss would have made each of the fund’s 1.1 million members more than $4,500 richer, and could have helped the state cover nearly 12% of the costs following Superstorm Sandy.
“DiNapoli is putting pensions at risk by betting on a losing strategy with a rogue company. Currently, Exxon is piling up debt to cover up declining profits and stranded assets — all while spending billions to look for new oil and gas reserves beyond those we cannot burn. The Company has spent almost 40 years trying to run out the clock on climate change: Opening another door to delay through non-binding shareholder resolutions means they just might win,“ said Clara Vondrich, Director of DivestInvest Philanthropy.
“New Yorkers have felt the impacts of climate change and know we must do everything in our power to fight the industry’s climate denial. If we don’t, it will be hard-working New Yorkers who will be left on the hook. Rather than remaining complicit with a morally corrupt company, Comptroller DiNapoli should stand up for New Yorkers and divest the pension fund,” said Denise Patel, Coordinator of the DivestInvest Network.
A growing number of pension funds are divesting from the fossil fuel industry for financial and legal reasons. Analysts expect the dominoes to keep falling. “Oil and gas stocks have been a major contributor to pension funds for decades. But that is changing,” said Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis. “Any fund that is not having internal discussions about fossil fuel exposure is not doing its fiduciary duty.”
As a sector, pension funds are the single largest institutional investor, followed by banks, investment firms, and insurance companies. According to the latest survey by the Global Pension Statistics Project (GPS), pension funds in the 35 OECD countries had nearly $40 trillion invested in financial markets in 2015. Divestment campaigners are increasingly focused on this opportunity, and the movement has helped generate a number of significant wins already – including legislation compelling massive pension schemes in California and Norway to divest from coal, divestment by federal state pension funds in Germany, and divestment by multiple local government pension funds, including the $6.4 billion Washington DC city government pension fund and a growing list of local authorities in the UK. As of December 2016, pension funds committed to divestment comprised 12% of all divestment commitments worldwide.
Contact: Thanu Yakupitiyage, U.S Communications Manager, 350.org email@example.com; 413-687-5160
For more information on the campaign to #DivestNY, visit: divestny.org
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