divestment

By various - unamed CALPers members, February 10, 2021

In order to protect our pension, CalPERS needs to invest in solutions to the climate crisis and a Just Transition to a sustainable future.

What do we mean by a Just Transition? CalPERS must:

• Stop investing in the declining fossil fuel industry and instead Invest in growing and profitable sustainable sectors with well-paying union jobs.
• Unless we ensure that no worker is left behind as we transition to renewable energy, we will have failed the communities that are already harmed the most by fossil fuels.

Fossil Fuels Impact Vulnerable Communities and Workers the Most

• Fossil fuel extraction, refining, and power plants create sacrifice zones where pollution causes higher rates of disease and respiratory illnesses. Communities of color and lower income communities are more likely to live in these areas.
• Climate change contributes to wildfires, drought, coastal flooding, and hurricanes.
• Climate change increases pregnancy risks, particularly for Black mothers.

Fossil Fuels Are Putting Our Pensions at Risk

If you have a pension with CalPERS, you are invested in fossil fuels. $30 billion of CalPERS investments are in the coal/oil/natural gas industry.

• In 2019, CalPERS lost $1 billion on tar sands oil investments alone.
• Fossil fuel investments have been losing money for 10 years, while the S&P 500 as a whole increased in value and outperformed them 2:1.
• Fossil fuel investments are increasingly risky as the world transitions to more available and cheaper renewable energy - solar, wind, geothermal, and hydro.

As fossil fuel companies face dramatic losses, they lay off workers while continuing to pay hefty dividends to shareholders such as CalPERS. That money ought to go instead to a superfund for impacted workers and communities as part of a just transition.

CalPERS Board and staff refuse to divest - but continuing to hold will only ensure more losses, more pollution, and more injustice for workers.

Tell CalPERS to Stop Supporting Climate Chaos:

• Sign the divestment petition at https://fossilfreeca.org/petition.
• Ask your union local to pass a resolution to Divest/Reinvest
• Support a Just Transition for all who are affected by fossil fuels.

Read the text (PDF).

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”.

By Staff - Labor Network for Sustainability, January 2021

New York State Comptroller Tom DiNapoli has announced that New York State’s Common Retirement Fund, valued at over $226 billion, will decarbonize by 2040. The plan includes interim trajectory goals, rigorous reporting, staff hiring, and transparency.

New York State is the largest pension fund in the world to take this kind of bold and comprehensive climate action. The announcement follows an eight-year campaign by #DivestNY, a coalition of more than 40 different groups.

Nancy Romer, chair of the environmental justice working group of Professional Staff Congress-City University of New York(CUNY)/American Federation of Teachers 2334, representing 30,000 faculty and professional staff at CUNY, says, “As state workers, we stand in solidarity with other state workers who can rest assured that their hard-earned pension funds will be protected from the failing fossil fuel sector of our economy and from the destructive effects it has on our planet’s climate.” Doug Bullock, a state pensioner and Albany County Central Federation of Labor first Vice President, says:

I urge the members and leadership of my union the Public Employees Federation and CSEA (Civil Service Employees Association) and NYSUT (New York State United Teachers) to support “decarbonize the NYS Pension Fund” which includes divesting from fossil fuel corporations and is a major step forward by Comptroller DiNapoli. This divestment will be converted to investing in renewable and sustainable energy sources, making our fund more fiscally responsible and valuable during the climate change crisis. The Albany County Central Federation of Labor passed a resolution supporting divestment in fossil fuels as did the Troy Area Labor Council (TALC). As First Vice President of ACCFL and Delegate to TALC, I urge the entire labor movement to decarbonize pension funds.”

DivestNY and Local unions in NYSUT are now calling for fossil fuel divestment from the New York State Teachers Retirement System as a next step.

By Staff - Fossil Free, December 9, 2020

New York — Today, New York State Comptroller Tom DiNapoli announced that the $226 billion New York State Common Retirement Fund (Fund) is moving to divest from the riskiest oil and gas companies by 2025 and decarbonize by 2040. 

New York’s announcement is the biggest leap forward worldwide on climate finance action in 2020, an otherwise bleak year for the planet. It creates the most comprehensive program of any large public fund worldwide to divest from fossil fuels, decarbonize across a massive portfolio, and put major financial pressure on public companies — from auto companies to utilities — to align their operations with the scale of climate action needed to stave off worldwide catastrophe.

The victory comes eight years after New Yorkers launched the #DivestNY campaign, days ahead of the December 12 fifth anniversary of the Paris climate accord signing, and sets the bar for climate finance action ahead of COP26 next year in Scotland.

Comptroller DiNapoli is taking a ground-breaking, systematic approach to reviewing and assessing each fossil fuel company sub-sector, with a process grounded in fiduciary responsibility. The results of the first review, targeting the coal sub-sector and completed earlier this year, resulted in divestment from 22 coal companies. Similar divestment action is anticipated from the current tar sands review, which is set to conclude next month. After the tar sands review, the Comptroller will review fracking companies,Oil majors, fossil fuel service companies, and oil and gas transportation and pipelines. All reviews and divestment actions will be completed by 2025.

Just like New York City’s 2018 announcement of a five-year plan to divest its massive pension funds from fossil fuels, today’s announcement by Comptroller DiNapoli will reverberate globally, boosting divestment and climate finance campaigns across the nation and around the world. The commitment to decarbonize the Fund by 2040 is ten years sooner than any other US pension fund. This plan also includes interim trajectory goals, rigorous reporting, staff hiring, and transparency. 

NYS-CRF historically has held over $12 billion in fossil fuels, including more than $1 billion invested in ExxonMobil alone. Divestment will ensure that the NYS fund will end such financing. 

To celebrate this victory and encourage funds across the country and around the world to take similar action, the multiracial, multi-generational #DivestNY coalition is hosting a virtual press conference and rally at 10amEST today, featuring youth activists, pensioners, financial experts, and academics, along with Bill McKibben, New York State Senator Liz Krueger, and Assemblymember Felix Ortiz. The legislators co-prime sponsored divestment legislation and pushed for such historic action.

The #DivestNY coalition, composed of 40+ groups, won this campaign through focused and diligent campaigning over many years. The campaign demand launched after Superstorm Sandy devastated the Northeast in 2012, costing nearly $70 billion in damages.

In the face of COVID-19, the coalition shifted into virtual campaigning and video conference advocacy and lobbying, escalating momentum toward this victory. In September, 1100+ Academics sent a letter to Comptroller DiNapoli urging him to divest from fossil fuels. To date, over 1300 institutions representing more than $14 trillion in assets have committed to some level of fossil fuel divestment.

Today’s announcement also builds momentum for activists and experts to convince the $120 billion New York State Teachers’ pension fund to divest. The #DivestNY coalition will continue to work alongside Comptroller DiNapoli, the expanding team at the Comptroller’s office working on climate finance, and public officials at all levels to ensure this commitment, its benchmarks, and a fossil free world become reality.

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).

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. 

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).

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).

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).