NYC's Public Pensions Should Dump Fossil Fuels, Activists Say

TRIBECA, NY — New York City's public pension funds should pull their investments from the fossil fuel industry and use that money to support renewable energy, environmental advocates said Wednesday.

At a hearing on climate change held by Public Advocate Letitia James, advocates argued it's immoral and fiscally irresponsible to continue investing in companies that contribute to global climate change, which is increasingly threatening the city.

At the end of the hearing, James said she supports divesting city pension money from the top 200 fossil fuel companies.

"We must do our part to rapidly transform the fossil fuel economy before it destroys everything we hold dear," Michael Fabricant, a Hunter College social work professor and a vice president of CUNY's Professional Staff Congress, said during the hearing at Borough of Manhattan Community College.

Environmental activists are leading a global movement pushing public pension funds to divest from the fossil fuel industry. Large cities including San Francisco, Seattle and Washington, D.C. have reportedly made or fulfilled commitments to divest pension money from the industry.

New York City has five pension funds worth about $187 billion together, according to city Comptroller Scott Stringer's office. As of last year, the funds had more than $3 billion invested in fossil fuel firms including Exxon and Chevron, according to 350.org, a major proponent of the divestment movement.

Stringer, who oversees the funds, commissioned a study in February that will evaluate the pension funds' carbon footprint and the risks climate change poses to them. Stringer's office expects the study to be done by the end of this year.

Three of the five funds divested from thermal coal in 2015. But some officials say the city has to consider its responsibility to grow the pension funds before pulling out of fossil fuel investments entirely.

"The pension funds are currently reviewing their investments and how best to address the risks that climate change poses," Freddi Goldstein, a spokeswoman for Mayor Bill de Blasio, said in a statement. "Fossil fuel divestment is one strategy under consideration, but any changes must be considered in the context of the pension funds’ fiduciary duties to their members and beneficiaries."

Activists argue it's wrong for New York City to profit from companies that propel climate change, which threatens to put swaths of the city underwater over the next two centuries.

Those profits are dwindling anyway, advocates said — fossil fuel firms are hitting financial struggles as awareness about climate change and investments in renewable energy grow. The city's teachers pension fund, the largest of the five, lost about $135 million from its oil and gas stock investments in the 2015 fiscal year, according to a report 350.org commissioned in 2016.

"Continuing to invest in a business model that perpetuates climate change and worse, losing money for those investments, is not morally or financially acceptable," Justin Flagg, a spokesman for state Sen. Liz Krueger (D-Manhattan), said at Wednesday's hearing.

The city is making efforts to stem the tide of climate change locally. Mayor Bill de Blasio plans to impose environmentally friendly construction rules for buildings and take other steps to reduce the city's greenhouse gas emissions by 80 percent by 2050.

The city's efforts to fight the dangers climate change poses are "completely undermined" by its investments in fossil fuels, said Beta Coronel, a 350.org staffer from Queens. Other big cities would likely follow New York's lead if it divested its pension money, activists argued.

There's also a push for divestment on the state level. Krueger has sponsored the Fossil Fuel Divestment Act in the state Legislature, which would prohibit state pension investments in oil and gas companies.

Under Stringer, the pension funds have $3 billion in green investments, including 40 percent of their $8.1 billion real estate portfolio and nearly a quarter of their $905 million infrastructure portfolio, the comptroller's office says.

"Climate change is real and the threat is undeniable. That’s why we’ve done more to protect the environment, invest in green technologies, and fight science-deniers than any Comptroller in history," Tyrone Stevens, a spokesman for Stringer, said in a statement. "We look forward to the Public Advocate’s full report and recommendations."

(Lead image: Steam rises from a coal-fired power plant in Germany. Photo by Lukas Schulze/Getty Images)