New York City and State announce plans to divest pension funds; Canadian Public Pension fund holds on to coal

I love new yorkNew 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.

Related reading re New York activism : The Divest NY website;  “How New Yorkers won fossil fuel divestment”  from the Indypendent (Jan. 12); and Noami Klein’s article in The Intercept (Jan. 11).

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?”

 

 

Progress at COP23 as Canada’s Minister pledges to include the CLC in a new Just Transition Task Force

cop23An article in the Energy Mix reflects a widely-stated assessment of the recently concluded Conference of the Parties in Bonn: “COP23 Ends with solid progress on Paris Rules, Process to Push for Faster Climate Action” :  “It was an incremental, largely administrative conclusion for a conference that was never expected to deliver transformative results, but was still an essential step on the road to a more decisive “moment” at next year’s conference in Katowice, Poland.”  A concise summary of outcomes  was compiled by  the  International Institute for Environment and Development, including a link to the main outcome document of the COP23 meetings – the Fiji Momentum for Implementation .  Germany’s Heinrich Böll Institute also issued a checklist and assessment titled  We will not drown, we are here to fight  . The UNFCCC provides a comprehensive list of initiatives and documents in its closing press release on November 17. And from the only Canadian press outlet which attended COP23 in person, the National Observer: “Trump didn’t blow up the climate summit: what did happen in Bonn?” .

What was the union assessment of COP23? The International Trade Union Confederation expressed concern for the slow progress in Bonn, but stated: “The support for Just Transition policies is now visible and robust among all climate stakeholders: from environmental groups to businesses, from regional governments to national ones. The importance of a social pact as a driver to low-carbon economics means we can grow ambition faster, in line with what science tells us. ”  The European Trade Union Confederation (ETUC) also expressed disappointment, reiterating the demands in its October  ETUC Resolution and views on COP 23  , and calling for a “Katowice plan of action for Just Transition”  in advance of the COP24 meetings next year in Katowice, Poland.

The biggest winner on Just Transition was the Canadian Labour Congress, who pressed the Canadian Minister of Environment and Climate Change outside of formal negotiations at Bonn and received her pledge for federal support for the newly-announced Just Transition Plan for Alberta’s Coal Workers –  including flexibility on federal  Employment Insurance benefits,  and a pledge that  Western Economic Diversification Canada will  support coal communities.   Importantly, “Minister McKenna also announced her government’s intention to work directly with the Canadian Labour Congress to launch a task force that will develop a national framework on Just Transition for workers affected by the coal phase-out. The work of this task force is slated to begin early in the new year”, according to the CLC press release “  Unions applaud Canada’s commitment to a just transition for coal workers” .  The background story to this under-reported breakthrough  is in the National Observer coverage of the Canada-UK Powering Past Coal initiative, on November 15 and November 16.  Unifor’s take on the Task Force is here .

This global alliance is the biggest COP23 news story for Canadians, coming near the end of meetings. Canada, along with the U.K. and the Marshall Islands, announced the “Powering Past Coal” global alliance to phase out dirty coal power plants around the world.  See the government press release for Canada  and the U.K. , and see the Official Declaration, which states:

  • “Government partners commit to phasing out existing traditional coal power in their jurisdictions, and to a moratorium on any new traditional coal power stations without operational carbon capture and storage within their jurisdictions.
  • Business and other non-government partners commit to powering their operations without coal.
  • All partners commit to supporting clean power through their policies (whether public or corporate, as appropriate) and investments, and to restricting financing for traditional coal power without carbon capture and storage.”

Amongst the 20-some jurisdictions already signed up to the alliance are Canada , the provinces of Alberta, British Columbia, Ontario, Quebec, the city of Vancouver, and the states of Washington and Oregon.  Noticeably absent so far are the major coal polluters – the U.S., Germany, China and India. The stated goal is to grow the alliance to 50 members jurisdictions.  The Energy Mix provides a summary and related interviews;   Climate Action Network-Canada reacted with “Powering Past Coal Announcement Shows Rise of International Collective Action; Domestic Implementation will Bring it Home” (Nov. 16);  DeSmog UK calls the alliance the “start of a journey” ;  German news source DW provides an international viewpoint of the alliance, especially focused on the politically-charged debate about coal in Germany.

There were other breakthoughs at COP23, including on  Gender Equality, Indigenous Rights, and Agriculture.   Delegates adopted the first Gender Action Plan  .  As reported in “To combat climate change, increase women’s participation”  in DW  (Nov. 20), for the first time,  there is a plan which  sets out specific activities, with a timeline for implementation, and allocation of responsibilities.  National governments are responsible for reporting back on progress on these activities in 2019.

COP23-It takes roots Indigenous NetworkThe Guardian reported “Indigenous groups win greater climate recognition at Bonn summit”   (Nov. 15) citing the improved language from the 2015 Paris Agreement.  ” The technical document approved at COP23 states:  countries “should, when taking action to address climate change, respect, promote and consider their respective obligations on the rights of indigenous peoples and local communities.”  In response, the Indigenous Environmental Network states: “… while progress has been made on the UNFCCC traditional knowledge Platform for engagement of local communities and Indigenous Peoples, Indigenous Peoples’ rights are not fully recognized in the final platform document of COP 23. The burden of implementation falls on local communities and indigenous peoples.”  News and reports released by It Takes Roots, the Indigenous Environmental Network COP23 delegation, are here, including their report in opposition to carbon pricing: Carbon Pricing: A Critical Perspective for Community Resistancereleased at COP23.

Finally, regarding agriculture:   As reported by the  International Institute for Environment and Development  “After years of fraught negotiations on this issue, the COP23 decision on agriculture  requests the subsidiary bodies of the UNFCCC to simultaneously address vulnerabilities of agriculture to climate change and approaches to tackle food security. Breaking the deadlock on issues connecting agriculture and climate change was a big win for COP23.”