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New York, New York: Another Divestment Win

By staff - Fossil Free California, January 25, 2021

Three of New York City’s five pension funds announced they are divesting a total of $4 billion from fossil fuels following a six year campaign led by a multiracial, multigenerational coalition. Pension funds for teachers, school administrators, and civil servants voted to divest from fossil fuels. Police and fire department pension funds have not yet voted to divest. Said NYC Mayor Bill de Blasio, “Divestment is a bold investment in our children and grandchildren, and our planet.” The divestment of the $239 billion NYC pension funds is the largest municipal pension fund divestment to date.

The New York City commitment joins last month’s pledge by NY State Comptroller Tom Di Napoli to divest the $226 billion state Common Retirement Fund from the riskiest fossil fuel companies, and fully decarbonize the portfolio by 2040, a decade earlier than the “net-zero by 2050” pledges made by other funds such as California’s CalPERS.

After a 2018 divestment commitment made by Mayor de Blasio and NYC Comptroller Scott Stringer, a coalition of retirees, youth activists, and union representatives held countless meetings with city officials and staff, scoring interim successes on related projects such as stopping the Williams Pipeline, getting a ban on all new fossil fuel projects in NYC, and doubling NYC investments in climate solutions. Youth and elders from New York Communities for Change, People’s Climate Movement NY, DivestNY, 350NYC, 350.org, and a host of other organizations celebrated every success and focused on growing a stronger and stronger coalition. New York City coupled its 2018 commitment to divest with a string of lawsuits against Big Oil – see “Divest and Sue”.

“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 People’s 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. Although it has taken almost a decade, from small living room meetings to a city-wide cry for divestment, the People’s Climate Movement-NY proudly stands today with Comptroller Stringer and Mayor de Blasio, and applaud them for taking this positive step towards a fossil free future.”

Divestment is a strong remedy for the social and environmental harms caused by continued fossil fuel use and investment, but the urgency of the climate crisis demands this kind of bold climate action. Divestment should be part of every engagement strategy, and it is the best tool for removing climate-related financial risk from a portfolio. 

New York State and New York City are showing us the way: now CalPERS, CalSTRS, and California’s 20 municipal pension funds need to follow suit. To catch a glimpse of some of the New York climate activists that made this victory possible, check out this video of our coalition panel called “Youth and Elders Unite for Climate-Safe Pensions” that aired during last summer’s “Earth Day Live”.

CalPERS Continues to Invest in Coal

By Robert Dam and Vanessa Warheit - Fossil Free California, September 2020

This 14-page report shows that CalPERS continues to hold millions in coal producers that make the majority of their revenue from thermal coal. In fact, CalPERS even increased its investments in Exxaro, a company that qualified for divestment in 2017 but was retained by CalPERS because they said they were investing more in green energy. But Exxaro’s modest clean energy initiatives are dwarfed by its current coal operations in South Africa, and by its intent to seek permits for a six-fold expansion of its coal mining, which could be a tipping point for the climate.

In recognition of coal’s outsized contribution to human-caused climate change, in 2015 California passed a law – SB 185 – requiring CalPERS and CalSTRS to divest from companies making 50% or more of their revenue from the mining of thermal coal.  A 50% share of revenue sets a very high bar that can be reached by only the small number of “pure-play” coal mining companies that remain in business.  Many investors, including BlackRock and the State of New York, define a “coal company” with a much lower threshold of 25% or even 10%.

If CalPERS coal holdings are analyzed more broadly, using the criteria of the Global Coal Exit List, it’s clear that CalPERS holds billions in coal – coal mining companies, coal-fired utilities, coal distribution and services, and large diversified companies with substantial coal operations. Instead of winding down its investments in coal, which was the intent of SB 185, CalPERS actually increased investments in coal by $1.5 billion dollars between 2018 and 2019, for a total of $6.5 billion throughout the whole coal value chain. 

CalPERS’ coal exclusion policy is weak compared to those of many other institutional investors. By failing to set a strong coal exclusion policy, CalPERS has already lost billions in absolute value on its coal investments, and the sector continues to decline. As New York State’s Tom DiNapoli said when he decided to divest 22 thermal coal companies, “After a thorough assessment, the fund has divested from 22 thermal coal mining companies that are not prepared to thrive, or even survive, in the low-carbon economy.”

Download (PDF).

Regenerative & Just 100% Policy Building Blocks Released by Experts from Impacted Communities

By Aiko Schaefer - 100% Network, January 21, 2020

The 100% Network launched a new effort to bring forward and coalesce the expertise from frontline communities into the Comprehensive Building Blocks for a Regenerative and Just 100% Policy. This groundbreaking and extensive document lays out the components of an 100% policy that centers equity and justice. Read the full report here.

Last year 100% Network members who are leading experts from and accountable to black, indigenous, people of color (BIPOC) and frontline communities embarked on a collective effort to detail the components of an ideal 100% policy. The creation of this 90-page document was an opportunity to bring the expertise of their communities together.

The Building Blocks document was designed primarily for frontline organizations looking to develop and implement their own local policies with a justice framework. Secondly, is to build alignment with environmental organizations and intermediary groups that are engaged in developing and advocating for 100% policies. The overall goals of the project are to:

  • Build the capacity of BIPOC frontline public policy advocates, so that impacted community groups who are leading, working to shape or just getting started on 100% policy discussions have information on what should be included to make a policy more equitable, inclusive and just
  • Align around frontline, community-led solutions and leadership, and create a shared analysis and understanding of what it will take to meet our vision for 100% just, equitable renewable energy.
  • Create a resource to help ensure equity-based policy components are both integrated and prioritized within renewable energy/energy efficiency policies. 
  • Build relationships across the movement between frontline, green, and intermediary organizations to create space for the discourse and trust-building necessary to move collaboration forward on 100% equitable, renewable energy policies. 

Fossil Futures: The Canada Pension Plan's Failure to Respect the 1.5-degree Celsius Limit

By James K. Rowe, Steph Glanzmann, Jessica Dempsey and Zoë Yunker - Canadian Centre for Policy Alternatives, November 2019

THE WORLD’S LARGEST PENSION FUNDS comprise over half of global investment capital. The Canada Pension Plan Investment Board (CPPIB) manages one of the country’s largest pools of investments, at $400 billion. How pension funds choose to invest has significant bearing on how we collectively address the climate emergency and the needed energy transition away from fossil fuels. In this report we ask: Is the CPPIB investing with the 1.5-degree Celsius limit on global average temperature rise in mind?

In April 2016, Canada was among 195 countries that signed the Paris Agreement, committing to “holding the increase in the global average temperature to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius.”

Our major finding is that the CPPIB is not investing with the 1.5-degree limit in mind. Within its public equities portfolio, it has over $4 billion invested in the top 200 publicly traded fossil fuel reserve holders (oil, gas and coal). To stay within 1.5 degrees, these companies can extract only 71.4 billion tonnes of carbon dioxide, yet the companies the CPPIB is invested in have 281 billion tonnes in reserve, meaning they have almost four times the carbon reserves that can be sold and ultimately burned to stay within 1.5 degrees. Since reserves are factored into current company valuations, this means the CPPIB has invested billions of dollars in companies whose financial worth depends on overshooting their carbon budget.

This is a moral and ecological failure. It is also a financial risk. As energy generation shifts away from fossil fuels, investors who do not respond could be left with “stranded assets”—investments that are no longer profitable. In its 2019 Financial System Review, the Bank of Canada included climate risk in its analysis for the first time. Canadian fossil fuel companies and their investors are especially exposed to stranded asset risk since the majority of oil produced in Canada is high-cost, carbon-intensive bitumen from the oil sands. And yet, the CPPIB remains exposed to the biggest oil sands majors, with over $1.2 billion invested in Canadian Natural Resources Ltd., Suncor Energy Inc. and Cenovus. Canadian pension beneficiaries may therefore be particularly vulnerable to stranded assets and the financial risks they pose.

Read the report (PDF).

Alberta’s Coal Phase-out: A Just Transition?

By Ian Hussey and Emma Jacksonn - Parkland Institute, November 2019

This report explains that Alberta will have little coal-fired electricity left by the end of 2023, six years ahead of the federally mandated coal phaseout deadline of December 31, 2029. This relatively rapid transition away from coal power is the result of numerous decisions made since 2007 by various provincial and federal governments, a few arms-length agencies of the Alberta government, and several large publicly traded corporations that produce electricity for the Alberta market. Our report aims to evaluate Alberta’s electricity transition to date against principles and lessons gleaned from the just transition literature.

Following the introduction, the report proceeds as follows. In Section 2, we provide an overview of Alberta’s coal power industry, communities, and workforce. In Section 3, we delineate key principles and lessons from the just transition literature. In Section 4, we present case studies on the three companies affected by the Notley government’s accelerated coal phase-out (TransAlta, ATCO, and Capital Power). We examine the Notley government’s transition programs for coal workers in Section 5 and for coal communities in Section 6. Section 6 also includes a case study of Parkland County, which is the municipal district in Alberta perhaps most affected by the phase-out of coal-fired electricity. In Section 7, we provide an analytic discussion of our research results by evaluating the government’s transition programs against the key principles and lessons drawn from the just transition literature. In Section 8, we outline our conclusions based on the research results.

Read the report (Link).

UNISON launches a campaign for pension fund divestment with a Guide for Local Unions

By Elizabeth Perry - Work and Climate Change Report, February 6, 2018

On January 10, 2018,  the U.K. union UNISON launched a campaign to encourage members of local government pension schemes to push for changes in the investment of their funds – specifically, to “explore alternative investment opportunities, allowing schemes to sell their shares and bonds in fossil fuels and to go carbon-free.”  A key tool in this campaign: Local Government Pension Funds – Divest From Carbon Campaign: A UNISON Guide, which states:  “Across the UK there are nearly 50 divestment campaigns targeting local government pension funds ….. In September this year, it was revealed that a total of £16 billion is invested in the fossil fuel industry by Local Government Pension funds.”  The new Guide explains how the U.K. pension system works for local government employees, and provides case studies of existing divestment campaigns.  In addition, it provides “Campaign Resources”, including a model campaign letter, a glossary of pension and investment terms,  and it reproduces the Pensions and Climate Motion passed at the 2017 UNISON Delegates conference.  The Guide was written by UNISON, in collaboration with ShareAction – a registered U.K. charity that promotes responsible investment practices by pension providers and fund managers.

Information about the divestment campaign, as well as information about the National Auditor’s Report re the U.K. Green Investment Bank,  is included in the January-February issue of the newsletter of the  Greener Jobs Alliance , a U.K.  partnership of “trade unions, student organisations, campaigning groups and a policy think tank.” The Greener Jobs Alliance is part of the Campaign against Climate Change Trade Union Group, which is organizing an event on March 10 in London: Jobs & Climate: Planning for a Future that Doesn’t Cost the Earth

Banking on Climate Change: Fossil Fuel Finance Report 2020

By Alison Kirsch, et. al. - Rainforest Action Network, et. al., January 2019

Financial companies are increasingly being recognized — by their clients, shareholders, regulators, and the general public — as climate actors, with a responsibility to mitigate their climate impact. For the banks highlighted in this report, the last year has brought a groundswell of activism demanding banks cut their fossil fuel financing, at the same time that increasingly extreme weather events have further underscored the urgency of the climate crisis.

This report maps out case studies where bank financing for fossil fuels has real impact on communities — from a planned coal mine expansion in Poland, to fracking in Argentina, to LNG terminals proposed for South Texas. Short essays throughout highlight additional key topics, such as the need for banks to measure and phase out their climate impact (not just risk) and what Paris alignment means for banks. Traditional Indigenous knowledge is presented as an alternative paradigm for a world increasingly beset with climate chaos. November’s U.N. climate conference in Glasgow, on the fifth anniversary of the adoption of the landmark Paris climate agreement, will be a crucial deadline for banks to align their policies and practices with a 1.5° Celsius world in which human rights are fully respected. The urgency of that task is underlined by this report’s findings that major global banks’ fossil financing has increased each year since Paris, and that even the best future-facing policies leave huge gaps.

Read the report (PDF).

Should Your Union’s Pension Fund Divest from Fossil Fuels?

By staff - Labor Network for Sustainability, November 2018

This guide is designed to help you and your union consider whether you should divest from fossil fuels.

Working people collectively own an enormous amount of capital in our pensions. As a sector, pensions are the largest source of investment in financial holdings, even larger than standard investment houses and banks! Pensions constitute over $40 trillion! Our pension funds are invested in stocks and bonds that may not be serving our interests as working people and may be harming our families’ futures. Imagine what we might be able to support and build, imagine the great jobs we could create, if we use more of our pension funds to directly benefit our members and our families.

The Guide Contains:

  • An introduction to pension fund divestment and links to further information about it
  • Whether failure to divest can constitute a failure in fiduciary responsibility
  • How you can respond to divestment proposals and what questions need to be answered to reach a decision
  • How to start a divestment campaign yourself and answers to questions you may encounter from union members and divestment opponents

Download and Read the PDF Here.

NYC Public Pension Funds Fossil Fuels Divestment Campaign

By Nancy Romer - Labor Network for Sustainability, November 22, 2017

New York City Public Worker Pension Funds are on the cusp of selling off or divesting from their fossil fuel stocks.  How and why are NYC workers and climate activists so intent on achieving this?  What will it mean if they win this?  First some background.

Pension Funds are the Capital of US Workers

American workers too often feel overwhelmed by the power of capitalism in general and financial corporations in particular.  We may feel we have few economic resources with which to exert our opinions and defend our needs in a system based on money.  We may want to challenge “fossil fuel capitalism” that threatens the future for our grandchildren, but how?

Most American workers do own capital in the form of their own homes and, especially, in their pension funds.  Often the pension funds are managed with the support and participation of their unions or, more specifically, their union leaders. What if union members were to look closely at our pension funds and see how we could use them to create the kind of world we want:  investments in renewable energy, public transportation, affordable housing, public education, regenerative agriculture?

As a sector, pension funds are the single largest institutional investor followed by banks, investment firms, and insurance companies (Global Pension Statistics Project, GPS).  Approximately $40 trillion was invested by pension funds in financial markets in 2015 and that gives workers much more financial punch than we realize or use.

Pensions represent deferred compensation to workers and are negotiated through contracts on behalf of union members.  The intention is to provide income during retirement years. Workers have the potential financial power through collectively using their pension funds to both protect us through financially insecure times such as these and to have an impact on the world we want to see, the world we want to leave to our children and future generations.  Too often the second part of this formula—having an impact on the world we want to see—is totally ignored.

A growing number of American workers are questioning the wisdom of keeping their hard-earned deferred income in fossil fuel holdings.   Some unions, particularly public service unions, are joining the other financial entities, like universities, faith organizations, and foundations, which have divested their funds from fossil fuel holdings. Pension funds committed to divestment comprised 12% of all divestment commitments. Globally, a full $5.2 trillion in assets has been pledged to divest from fossil fuels. [Arabella Global Divestment Report, 2016]  That’s a huge start!  We are denying funds from the fossil fuel industry, devaluing their stocks, stopping to “feed the beast”, making fossil fuel corporations pariahs, like we did with tobacco companies that caused cancer.

First U.S. City to Ban Fossil Fuel Expansion Offers Roadmap for Others

By Kevon Paynter - Yes! Magazine, February 5, 2018

On a clear July morning three years ago, dozens of environmental activists pushed their kayaks into the Willamette River in Portland while others rappelled 400 feet from the top of St. Johns Bridge in an attempt to block a Shell Oil ship and its drilling equipment from leaving the port and entering Alaskan waters.

A key piece of Shell’s arctic drilling fleet, the vessel had arrived in Portland for repairs but its departure was delayed by protesters chanting “coal, oil, gas, none shall pass!” during two days of civil disobedience that became known as Summer Heat.

By the time the vessel finally sailed, the stage had been set for what would be a yearlong battle, culminating in an ordinance that banned construction and expansion of fossil fuel infrastructure in the city.

Last month, the Oregon Court of Appeals upheld Portland’s ban as constitutional, affirming the city’s power to regulate the safety and welfare of its residents and sending a powerful signal to cities that they too can take the lead to limit fossil fuel use.

nd while the court ruling could set precedent for similar climate action elsewhere, how Portland passed the nation’s first fossil fuel infrastructure ban holds important lessons for how other communities can use grassroots activism to implement the renewable energy transition in their cities.

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