New York City Mayor Bill diBlasio captured headlines on January 10 2018 for his announcement that New York City will divest from fossil fuels and will sue Exxon and other oil companies for the damages of Superstorm Sandy. Yet it was actually on December 19 that New York City Comptroller Scott Stringer and New York State Governor Andrew Cuomo first announced separate proposals to freeze current fossil fuel investments, divest New York’s public pension funds from fossil fuels, and reinvest in renewable energy. Common Dreams summarized the announcements in ” ‘Undeniable Victory’: Cheers Follow Proposals to Divest Massive New York Pensions From Fossil Fuels” . Reaction from 350.org (Dec. 19) emphasized the importance of five years of citizen activism , and quoted Bill McKibben, who emphasized the symbolic importance of New York’s announcement: “Coming from the capital of world finance, this will resonate loud and clear all over the planet. It’s a crucial sign of how fast the financial pendulum is swinging away from fossil fuels.” (As further proof, in November, administrators of Norway’s $1 trillion sovereign wealth fund recommended no further investment in fossil fuels and divestment from existing oil and gas shares , and in the U.K., legal changes are in the works to ease divestment for pension funds.)
At the state level, Governor Cuomo’s press release states: “Governor Cuomo and Comptroller DiNapoli will work together to create an advisory committee of financial, economic, scientific, business and workforce representatives as a resource for the Common Retirement Fund to develop a de-carbonization roadmap to invest in opportunities to combat climate change and support the clean tech economy while assessing financial risks and protecting the Fund.” The New York Common Fund of the state manages approximately $200 billion in retirement assets for more than one million New Yorkers and is heavily invested in fossil fuels, with nearly $1 billion invested in ExxonMobil alone.
At the city level, officials have set a goal of divesting the city’s funds from fossil fuel companies within five years , according to the press release from the Office of the Comptroller, which also highlights the complex process involved. In February 2017, the Office of the Comptroller had issued a press release stating, “the Trustees of the New York City Pension Funds … will conduct the first-ever carbon footprint analysis of their portfolios and determine how to best manage their investments with an eye toward climate change. In the 21st century, companies must transition to a low-carbon economy, and a failure to adapt to the realities of global warming could present potential investment risks.” The New York City pension fund includes municipal employees, teachers, firefighters and police.
Contrast the New York divestment announcements with the continued fossil fuel investment of the Canadian Pension Plan Investment Board (CPPIB), revealed in two new reports. In early December, Friends of the Earth Canada, as part of its ongoing campaign, released Canadian Coal Investment: Powering Past the Coal Alliance, and Urgewald, a German organization, released Investors vs. the Paris Agreement. The two reports “present a compelling picture of entrenched investors holding onto the old dirty economy and its growing risks at a time when politicians are committing to the phase out of coal.” – specifically, the Powering Past Coal Alliance launched by Canada and Great Britain at COP23 in Bonn in 2017. The Powering Past Coal Declaration commits governments to phasing out existing traditional coal power and placing a moratorium on any new traditional coal power stations without operational carbon capture and storage, and commits all partners to supporting clean power through their policies and investments, as well as restricting financing for traditional coal power stations without operational carbon capture and storage. In an October 2017 press release, Friends of the Earth representatives asked, “Why is the CPPIB ignoring government policy and undermining Canada’s diplomatic efforts to lead a global phase-out of coal?” . To date, there has been no public statement adjusting the Sustainable Investing position of the CPPIB to bring it in line with the Powering Past Coal Alliance Declaration.
Canadian Coal Investment: Powering Past the Coal Alliance calculates the CPPIB’s total investment in coal at $12.2 billion Cdn., with $267 million of that in new coal projects . In a global ranking in Investors vs. the Paris Agreement, Urgewald found that Canada is the 8th largest investor in new coal development, and names several Canadian institutions in its Top 100 Investors list, including SunLife (ranked #31 with $895 million invested); Power Financial Corporation (#53 with $631 million invested); Caisse de dépôt et placement du Québec ( #71 with $433 million invested); Royal Bank (#86 with $356 million invested); and Manulife Financial ( #98 with $282 million invested).
Also of interest: “Failure to Launch” in Corporate Knights magazine (Jan. 15 2018), which provides a serious discussion of the problems of pension plan regulation as the answer to its tagline question: “Why are Canadian pension funds dragging their feet when it comes to climate change?”