By Ramona du Houx February 2, 2021 New York City’s largest pension fund has sold off $4 billion in Exxon and other Oil and Gas corporations. The move is a historic win for climate action, and the planet. “New York City is standing up for future generations by becoming the first major US city to divest our pension funds from […]
New York City’s largest pension fund has sold off $4 billion in Exxon and other Oil and Gas corporations. The move is a historic win for climate action, and the planet.
“New York City is standing up for future generations by becoming the first major US city to divest our pension funds from fossil fuels. At the same time, we’re bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect their profits. As climate change continues to worsen, it’s up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient,” said Bill de Blasio, Mayor of New York City.
New York City announced in January 2018 that the city will divest its pension funds entirely from fossil fuel funds by 2022. The city’s pension fund is valued at $239 billion— the largest municipal pension fund to divest globally.
“As I’ve said before, this is a really big deal,” said Jeffrey Sachs, an economist at Columbia University and special adviser to the UN secretary general. “Since the announcement two years ago, other pension funds have followed suit. New York is the neighborhood of the very big money managers. It’s a powerful, personal signal to them that they can’t keep funding the sorts of projects they have in the past.”
NYC’s divestment commitment inspired worldwide action with funds like the Norwegian Sovereign Fund, and the City of London, and New York State’s pension fund. How the latter came about took years. New York State’s Legislature had a bill to gain more control over where the Common Retirement Fund invested. Just last month the Comptroller of the fund agreed to divestment, following in the path of New York City. (Comptrollers are officials in charge of these kinds of investments in New York.)
“Planet Earth is experiencing a climate crisis. The actions we take now as a society will impact the quality of life for future generations. To protect our environment, our dependence on fossil fuels and investment in companies that produce and promote fossil fuels must end. To achieve this goal, New York City is taking the necessary steps to divest from companies that harm our planet. While New York City moved forward, I worked in the legislature to require that the state employee pension fund divest monies from fossil fuel companies. We both have been successful as the Comptroller announced Divestment last December, thereby negating the necessity for the legislature to pass our bill,” said Former Assistant Speaker Felix W. Ortiz, an army veteran and Co-Chair of the Elected Official to Protect America (EOPA) Leadership Council.
Elected Officials to Protect America, a network of elected officials dedicated to helping combat climate change, has been working for Divestment from the state’s pension fund since 2017, with a letter where 220 New York elected officials signed to Governor Cuomo urging divestment. Assemblyman Ortiz authored this Divestment Act in the legislature, which mostly likely would have passed, once it was amended. Throughout the fall of 2020 more state senators were signing onboard to pass the bill. The House already had enough votes. The bill, along with advocacy from many groups, made New York State’s Comptroller realize he needed to set a goal for state investments to reflect net-zero greenhouse gas emissions by the year 2040.
“With every passing month the impacts of the climate crisis become more glaringly obvious and more dire. Nearly 1,200 institutional investors controlling over $12 trillion have chosen to divest worldwide. I commend Mayor de Blasio and Comptroller Stringer for having the foresight to divest New York City’s pension funds to protect returns for their members and retirees, and for understanding that their fiduciary duty includes ensuring that workers have a livable planet to retire on,” said State Senator Liz Krueger, Senate cosponsor of the Divestment Act.
“New York City has set a new bar for climate finance action. Today’s landmark action marks a bad day for Big Oil and a good day for the City’s pension systems and our planet. By taking billions out of the companies that own and profit off of fossil fuels, New York City is playing an enormous role in moving the financial industry towards a greener future,” said Bill McKibben, of 350.org.
The NYC pension fund trustees vote follows previous action to hire consultants to advise the city on divestment (2018 – 2020), prepare a divestment study (2020), and ongoing fiduciary review.
“It is right and just that, in the midst of the deadly pandemic, our beloved NYC is choosing life over death and acting on its commitment to divest the pension funds from fossil fuel investments,” said Marilyn Vasta, for Peoples Climate Movement NY.“For too long we have financially supported the polluters that harm us; it is time to make polluters pay as we invest in a just transition to renewable energy.”
Divestment has exploded over the past decade from a symbolic action by small college endowments into a worldwide movement that has led to over $14 trillion worth of investment funds divesting or committing to divest from the oil, gas or coal industries.
In order to fulfill the Paris climate agreement’s goals of staving off catastrophic climate change, all major finance of fossil fuels and deforestation must end by 2030.
New York City’s divestment affects just a piece of the $239 billion in pension assets managed by Stringer’s office. The two funds that voted to divest represent city teachers and other workers with a combined $168 billion under their management. Two smaller funds for the city’s police and firefighters, with a combined $63 billion, have not yet voted to divest. A fifth fund with $8 billion is expected to vote to divest soon, the NYC statement said.
“New York City is leading the way forward because we know the future is on the side of clean energy – not big polluters. I’m proud of the trustees,advocates and investment experts who worked with us to ensure a fiscally prudent and environmentally responsible divestment process and a greener future for generations to come, ” said New York City Comptroller Scott M. Stringer.
NYC is also working to leverage national and international partnerships to inspire other municipal leaders and governments to take similar actions, scale up their climate actions, and help to create a more inclusive economy for everyone. As such, New York City launched a toolkit in close partnership with the city of London and C40 Cities. This guide was prepared as part of the C40 Divest/Invest Forum, an initiative that helps urban leaders make the leap to effective and efficient divestment and accelerate green investment. The Forum has fourteen participating cities to date, including the latest joiners Auckland, Melbourne and Stockholm.