New Yorkers Issue New Challenge to Divest City & State Pensions from Fossil Fuels

NEW YORK - After a summer of record heat, ahead of the fourth anniversary of Superstorm Sandy and weeks before the Paris climate agreement officially comes into effect, New Yorkers are issuing a new challenge to New York City Comptroller Scott Stringer and New York State Comptroller Tom DiNapoli to divest New York’s combined $350 billion pension funds from fossil fuels and reinvest in climate solutions.

Eighteen organizations and individuals, representing a broad spectrum of New York society, including business, faith, academics, health, students, artists, and more, sent a letter to the comptrollers calling for the pension funds to use every tool at their disposal to curb the worst of climate impacts, and avoid the next Sandy-like storm, through divestment from fossil fuels.

The initial call for the State and City to divest launched in 2012, the same year that Superstorm Sandy devastated communities. Since then, more than 600 institutions and individuals representing over $3.4 trillion in assets have committed to some level of divestment, but the New York funds have yet to take action.

With the moral and financial reasons to divest adding up, the push may now be reaching a boiling point. Last year, Comptroller Stringer and Mayor Bill de Blasio publicly expressed support for divestment from coal. Additionally, New York City Councilwoman Helen Rosenthal and Councilman Costa Constantinides have called for divestment. One of New York City’s pension funds has started the process of exploring coal divestment.

The reticence has been costly. A March report revealed that the New York State Common Retirement Fund, the third largest pension fund in the country, lost a staggering $5.3 billion from holding onto its fossil fuel investments. New York City’s largest pension fund, the Teacher’s Retirement System of the City of New York, lost approximately $135 million from its fossil fuel holdings in only one year.

Last Saturday, New York City’s largest public employee union, District Council 37, held a forum exploring how divestment could promote clean energy and environmental justice. On October 28, New York State Senator Liz Krueger, Senator Brad Hoylman and Assemblyman Felix Ortiz, who introduced state legislation to divest the state pension fund, will co-sponsor a roundtable featuring a panel of financial experts and representatives from the state comptroller’s office.

The barrier to progress at the state level has been Comptroller DiNapoli, who has repeatedly argued against divestment, claiming that it is more effective to participate in shareholder engagement. That case is falling apart, however, as fossil fuel companies repeatedly ignore or vote down the fund’s requests. At Exxon’s shareholder meeting this past May, for example, New York State and the Church of England proposed a resolution that called for disclosure of basic climate impact reporting. Despite the resolution being non-binding, Exxon’s executives unanimously shot it down, resulting in ultimate rejection.

The case of Exxon is particularly egregious. Investigative reports revealed that, as far back as the 1970s, Exxon’s own scientists confirmed the impact of fossil fuel use on the climate, but executives instead chose to orchestrate a decades-long campaign of deception. Now, Exxon is under investigation by New York’s own attorney general Eric Schneiderman, the attorneys general of Massachusetts and California, and the Securities and Exchange Commission, for potential fraud concerning climate change.

As governments get serious about climate action, the pressure to divest will only grow. Earlier this month, the required number of countries ratified the Paris climate agreement to enter it into force, and it will officially take effect on November 4. Stringer and DiNapoli both traveled to the Paris climate talks last December and have repeatedly called for action on climate. Their lack of action on divestment, however, has undermined attempts to don the mantle of climate leadership.

Notable divestment commitments in the US include Washington, DC’s largest pension fund, the Rockefeller Brothers Fund, California’s CalPERS and CalSTRS, the New School in New York City, New York’s Union Theological Seminary, and the union-owned Amalgamated Bank.

QUOTE SHEET:

May Boeve, Executive Director of 350.org said, “Investments in the fossil fuel industry fund devastating climate impacts like Superstorm Sandy. Now, New Yorkers are coming together to push our comptrollers to take decisive action on climate and fully divest from this destruction. This challenge sends a clear message: it’s past time for New York’s comptrollers to stop propping up the fossil fuel industry, and reinvest in an economy that prioritizes people and planet.”

Mark Dunlea, chair of the state divestment committee for 350NYC said, "It is wrong for NY to invest our pension funds in fossil fuel companies which threaten the quality of life for our residents. Decades of shareholder advocacy have proven ineffective to curb corporate misbehavior. We need Stringer and DiNapoli to step up and provide the leadership needed to position New York as a world leader in confronting climate change.”

David Levine, Co-founder and CEO of the American Sustainable Business Council, which has a membership representing over 250,000 business owners, executives and investors across the country said, "The financial risks are too great to continue subsidizing and investing in fossil fuels. The economic data is proving instead the value of investing in the incredible growth in energy efficiency and renewable energy. The smart money is now on a future based on safe, renewable energy.”

Vanessa Green, Director of Divest-Invest Individual, said "Millions of public employees nationwide stand waiting for pension decision makers to protect their hard-earned savings from climate risk. Inaction or delayed action makes public servants pay three times: once via bad investments in companies deepening the climate problem, twice via exposure to the life-threatening harm of extreme weather events like Hurricane Sandy, and thrice via potential retirement fund losses. New York's comptrollers must be facilitators of, not barriers to, a safe and reliable future for the working backbone of their city and state."

Greta Neubauer, Director of the Fossil Fuel Divestment Student Network, said ​"New Yorkers, especially low income people and communities of color, have and will continue to feel the impacts of climate change very personally. As the generation who will watch this city sink if we do not take action, we refuse to sit idly by. Our city and state officials cannot continue siding with the industry responsible for this crisis, we need them to side with us."

The Rev. Fletcher Harper, Executive Director of GreenFaith said, “Our lives on this earth are a gift, and it’s not right for us to profit from an industry whose core business is devastating to the climate and to life itself. The time to divest is yesterday. It cannot happen too soon.”

Rebecca Foon and Jesse Paris Smith, Co-founders of Pathway to Paris said, “In order to avoid catastrophic climate change, significant shifts need to be made as we speak towards a renewable future. New York City and New York State have an immense opportunity to help lead this path towards a future that is no longer dependant on fossil fuels, while stimulating the green economy by divesting its pension funds from fossil fuel companies and investing in climate solutions. The time is now."