Fossil Fuel Divestment: NY City Mayor acts to Protect Portfolios and Planet for Future Generations

 “Fossil fuel companies have misled the public for too long, and we must take action now..."  -- Mayor de Blasio

Mayor de Blasio, Comptroller Stringer, and Pension Fund Trustees Announce Significant Next Step to Divest Pension Funds From Fossil Fuel Reserve Companies

December 18, 2018

Issue landmark Request for Proposal to analyze fossil fuel risks and develop divestment plan

NEW YORK—Mayor Bill de Blasio and Comptroller Scott M. Stringer today announced the next big step in the New York City Pension Funds’ action to address the risk posed by climate change by divesting from fossil fuel reserve owners – an unprecedented process and the first-of-its-kind in the United States.

The Request for Proposal (RFP) released today seeks advisers to analyze, evaluate, and recommend prudent fossil fuel divestment strategies for the New York City Employees’ Retirement System (NYCERS), the Teachers Retirement System (TRS), and the Board of Education Retirement System (BERS), together representing 70 percent of the total assets of the City’s $200 billion pension funds. The RFP will result in a comprehensive analysis of the City Pension Funds’ holdings and the risks the fossil fuel industry poses to pension assets.

This analysis – the first-of-its-kind of a pension fund of this size – will inform the development of a comprehensive and prudent divestment strategy to preserve the retirement funds of City employees and address climate change risks, consistent with fiduciary duty.

“Divestment is a critical part of our strategy to fight climate change while insulating our pension funds,” said Mayor de Blasio. “Fossil fuel companies have misled the public for too long, and we must take action now to protect our portfolios as well as our planet for future generations. I thank the Comptroller and the rest of my fellow Trustees for standing strong as we continue taking these steps to divest from fossil fuels.”

“The future of New York City can’t be tied to fossil fuels – and today, we’re taking the next big step to protect our planet and the retirement security of hundreds of thousands of New Yorkers,” said New York City Comptroller Scott M. Stringer. “Climate change poses an existential threat. But by moving towards a fossil fuel free investment strategy, New York City is planting the seed for a clean, green, and thriving economy that can truly support future generations. The steps we take in New York City set a precedent around the country and the world, and the leadership from the Mayor and the trustees are charting a roadmap for responsible climate action.”

Read more at the Official Website for the City of New York

State Comptroller announces $2 Billion Boost in Climate-Smart Investments

New York’s Giant Pension Fund Doubles Climate-Smart Investment

 

The $2 billion boost was announced at the Investors Summit on Climate Risk, where top fund managers discussed finance for a low-carbon, clean energy future.

By Nicholas Kusnetz  | Feb 1, 2018  |  Inside Climate News


America's third-largest public pension fund is ramping up its climate-savvy investments, New York State Comptroller Thomas P. DiNapoli announced to global finance leaders on Wednesday.

The fund, a huge and influential investor, plans to double its stake to $4 billion in a portfolio of companies that disclose and seek to lower their emissions of global warming pollution.

"We've particularly been concerned about how we can address the issue of climate risk and benefit our portfolio," DiNapoli said, speaking at the Investor Summit on Climate Risk, where money managers called for investors to face up to the risks of climate change and to accelerate action to fight global warming.

As the summit was underway at the United Nations on Wednesday, the UK Government's Met Office published an ominous new five-year forecast that adds urgency to the investors' climate concerns: Annual global temperatures could reach 1.5 degrees Celsius above pre-industrial levels within the next five years, the Met Office warned. The aim of the Paris climate agreement is to prevent warming from getting much beyond that level. 

The $2 billion in additional investment DiNapoli announced will go into a low-emissions index fund that New York's Common Retirement Fund created in 2016. While the low-emissions index fund—which has had an annualized investment return of 16.5 percent—represents just a fraction of the pension fund's more than $200 billion in assets, DiNapoli said he hopes to continue to grow the low-carbon portfolio.

The special climate fund is based on a traditional index fund made up of leading corporations, except that it weights its investments by considering whether the companies disclose their carbon footprints and act to reduce them.

Shareholders Push for Risk Disclosure

DiNapoli is one of several powerful officials from the city and state of New York who have sought to pressure fossil fuel companies and influence their investment and risk management practices. The city has launched litigation seeking to recover climate damages and pledged to divest its pensions funds from fossil fuel producers, and the state's attorney general has been in a long fight with ExxonMobil on its climate record.

Corporations have come under increasing pressure in recent years to better disclose the risks they face in a future of rising temperatures and greater restrictions on greenhouse gas emissions. DiNapoli's office helped lead a resolution approved last year by Exxon shareholders that requires the oil giant to report on those risks annually.

Putting the Freeze on Global Warming

By Moyers & Company .

The Archbishop of South Africa, Desmond Tutu, has called for an international “anti-apartheid-style boycott” against the fossil fuel industry in response to global warming. “People of conscience need to break their ties with corporations financing the injustice of climate change,” the Nobel Peace Prize laureate wrote in an essay earlier this month. Tutu’s call to action also urges a strategy of divestment, the selling off of stocks and other investments in the name of an urgent cause.

Bill Moyers talks with two leaders who helped inspire the new fossil fuel divestment movement that Tutu is encouraging. Ellen Dorsey is executive director of the Wallace Global Fund and a catalyst in the coalition of 17 foundations known as Divest-Invest Philanthropy. Thomas Van Dyck is Senior Vice President – Financial Advisor at RBC Wealth Management, and founder of As You Sow, a shareholder advocacy foundation.

They are urging foundations, faith groups, pension funds, municipalities and universities to sell their shares in polluting industries and reinvest in companies committed to climate change solutions.
Watch the video:

Read the transcript here.