New York – Today, in an op-ed published in Crain’s New York Business, Council Member Helen Rosenthal, State Senator Liz Krueger, and Assembly Assistant Speaker Felix Ortiz called on New York City and State officials to fully divest their pension funds from all fossil fuel holdings. Citing concerns about the risks of fossil fuel investments, as well as the goal of reducing emissions, Rosenthal, Krueger, and Ortiz encouraged State Comptroller Tom DiNapoli, Mayor Bill de Blasio, and City Comptroller Scott Stringer to build on the Mayor’s recent announcement that he would push the city’s pension funds to divest from coal and study divesting from all fossil fuels.
Council Member Rosenthal has long pushed for divestment at the city level. Senator Krueger and Assistant Speaker Ortiz co-sponsor the Fossil Fuel Divestment Act (S.5873/A.8011-A), which would require the state pension fund to divest from the top 200 fossil fuel companies by 2020.
Full text of the op-ed can be read below, and is also available here.
Among the many dangers we face from climate change, one that frequently goes unacknowledged is the threat to the financial stability of our city and state pension funds. Together these funds are responsible for the secure retirement of more than 1.5 million New Yorkers. By divesting these funds from coal, oil, and gas, we would take a prudent step toward protecting pension-holders, withdraw our support from companies that are driving climate change, and align our financial interests with our goals of moving toward a cleaner, fossil fuel-free energy system.
At least $5 billion of the $185 billion New York State Common Retirement Fund is invested in companies that mine, drill, and produce fossil fuels, and at least $3 billion of the five New York City pension funds is invested in fossil fuels. The value of these companies is highly dependent on their untapped reserves of coal, oil, and gas, yet if our efforts worldwide are to succeed in keeping the increase in global average temperature below 2 degrees Celsius, it will require keeping 80% of current coal reserves, 50% of gas reserves and 33% of oil reserves in the ground by 2050. That means that as the world takes action to prevent climate catastrophe, the value of fossil-fuel companies will plummet rapidly.
We must get ahead of the curve by beginning to phase out these investments now. Global action on climate change is inevitable; if we delay while other investors pull out of the market, our pension funds will lose significant value and taxpayers will be on the hook to meet our obligations to pensioners.
Last month Mayor Bill de Blasio, with the support of NYC Comptroller Stringer, called on New York City’s pension funds to divest from coal and to study divesting from all fossil fuels, as one of us, Councilwoman Rosenthal, has long called for. NYCERS, one of the city funds, recently voted unanimously to begin the process. We applaud these important steps and urge the mayor to quickly follow through on his pledge. The devil is always in the details, however, and we are hopeful the city’s study will provide meaningful information, such as how pension performance would be affected by divestment, the impact of investment in fossil fuel-free indexes, and how current investment strategies are taking into account risks associated with long-term devaluation of fossil-fuel stocks.
At the state level, Comptroller Thomas DiNapoli has the power to begin responsible divestment at any time. The Common Retirement Fund has already lost more than $100 million in coal investments in the last three years, and a recent report found that California’s two largest pension funds lost more than $5 billion in energy-related investments in the year ending June 30. In the absence of voluntary action from the comptroller, two of us, Sen. Krueger and Assembly Assistant Speaker Ortiz, have introduced the Fossil Fuel Divestment Act to send the message that it’s time to protect our pensions and put our money where our mouth is on climate—by moving it away from companies that profit from catastrophic climate change.
The challenges of climate change are real and require bold leadership at all levels of government. The sooner we move our pension investments out of the dirty fuels of the past, the sooner we can begin to repair and safeguard the future of our common home.
Liz Krueger is a state senator and Helen Rosenthal is a City Council member from Manhattan. Felix Ortiz is a state assemblyman from Brooklyn.