US public pension funds are the ‘guilty culprits of climate chaos’

As banks, insurance companies and institutional investors face mounting criticism around the world for their contribution to the destruction of the planet, a report released Wednesday reveals how US public pension funds are “funding the crisis climate”.

“With 10 years of data, there is hard evidence: divestment is a winning financial strategy.”

Advocacy group Stand.earth and Third Rail Economy searched the Climate Safe Pensions Network (CSPN) for 14 funds and “reported $81.6 billion in assets, or 5.9% of all fund assets, as likely “fossil fuel” assets, according to the report.

CSPN, a “network of divestment and shareholder advocacy campaigns in cities, counties, states and the United States” across North America, is coordinated by Stand.earth, which lobbies businesses and governments to put people and the environment first.

“Public pension funds are the quiet culprits of climate chaos,” Amy Gray, Stand.earth’s senior climate finance strategist, said in a statement. “With 10 years of data, there is hard evidence: divestment is a winning financial strategy. The fastest way for pensioners to fight climate change is to divest fossil fuel assets and invest in just and equitable climate solutions.”

Stand.earth’s statement highlighted some key findings from what it called a “first of its kind” report.

“Nine of the funds listed in the report are investing more than $281 million in TC Energy, the company behind the controversial Coastal GasLink pipeline that violates Indigenous rights on Wet’suwet’en lands, including police raids militarized in British Columbia, Canada,” the group noted. . “Pension funds have also invested more than $3.24 billion in oil sands majors Canadian Natural Resources, Cenovus, ConocoPhillips, Exxon and Suncor.”

The 14 funds analyzed are based in Alaska, California, Colorado, Illinois, Maine, Massachusetts, Minnesota, New Jersey, New York, Oregon and Washington. They include the Chicago Teachers’ Pension Fund.

Educator and divestment organizer Nick Limbeck noted that the world is rapidly approaching the 1.5°C temperature threshold of the 2015 Paris agreement, “which will trigger climate feedback loops that will send warming climate out of control, but our Chicago teachers’ pension fund still has $600 million invested in fossil fuel companies.”

“As teachers, we are called to nurture the next generation,” Limbeck said. “Now is the time to divest from fossil fuels. Let’s give our students a chance to live and thrive in a world without climate catastrophe.”

“Let’s give our students a chance to live and thrive in a world without climate catastrophe.”

Three of the funds analyzed are from the Golden State: the California Public Employees Retirement System (CalPERS), the California State Teachers Retirement System (CalSTRS), and the San Mateo County Employees Retirement Association (SamCERA).

“It is unconscionable that a fund, especially teacher pensions like my CalSTRS pension, continues to invest nearly $16 billion in an industry that has caused this existential climate crisis,” said fund beneficiary Jane Vosburg. and Chairman of the Board of Fossil Free California.

“Costly wildfires across the state have already leveled communities and schools and displaced and traumatized our students,” she continued. “Since 2014, teachers like me, students, and local teachers’ unions representing 160,000 grantees have urged CalSTRS board members (two of whom support divestment) to divest.”

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Addressing another fund in the report, Maine Youth for Climate Justice said “the main duty of the Maine Public Employee Retirement System (MainePERS) is to ensure that the pension fund is well funded and protected against material risks. and unnecessary”.

“These fossil fuel companies represent exactly the type of risk they are charged with minimizing,” the organization added. “The bottom line is that fossil fuels are not a safe investment for Maine, not safe for future generations, and not safe for public employees who rely on this pension fund to sustain them as they age.”

Devon Reynolds, a University of Colorado graduate student and member of the Colorado Public Employees’ Retirement Association (PERA), pointed out that some proponents of divestment have already provided a role model for those still investing in fossil fuels.

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“PERA should follow the lead of the New York State Comptroller, who announced that his office would decarbonize the entire pension fund portfolio by 2040 with interim targets, completing a systematic review of all investments in fossil fuels within four years, including divestment from all companies that do not have a plan to exit fossil fuels,” Reynolds said.

“This includes transitioning their businesses away from producing, servicing or transporting oil and gas, and aligning with the Paris climate accord,” Reynolds added. “PERA must divest from fossil fuels.”

The report also highlights similar initiatives taken by “iconic and industry-leading institutions such as Harvard University and the University of Toronto, Dutch and Canadian pension fund giants PME and CDPQ, French public bank La Banque Postale and the Ford Foundation and the John D. and Catherine T. MacArthur Foundation”, and states that the divestment movement “has reached a threshold”.

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Students demanding that Harvard University divest from fossil fuels block the entrance to University Hall on the school's campus in Cambridge, MA on March 28, 2017. (Photo: Keith Bedford/The Boston Globe via Getty Images)

According to the Global Fossil Fuel Divestment Pledges Database, 1,500 institutions around the world representing $39.88 trillion in assets have made some sort of pledge to abandon the climate-destroying industry.

“The divestment and investment movement is absolutely having an impact,” the report said. “Fossil fuel companies are losing their political power. Wall Street has been forced to admit that the move makes it harder for the industry to raise capital and complete new infrastructure. This is essential if we are to succeed in limit carbon emissions.

The report calls on the movement to “go even further” by requiring all pension funds to: publicly commit to fully divest from fossil fuels; shift to investing at least 5% of their assets in climate solutions, doubling to 10% by 2030; and adopt net-zero plans in line with the Parisian 1.5°C target.

Deborah McNamara, campaign manager at 350 Colorado, called the divestment an “ethical responsibility” given that “maintaining the status quo of fossil fuel generation and investment will undoubtedly lead to self-created catastrophe.”

“Attempting to profit from investments in companies whose profits depend almost exclusively on continuing practices that cause climate breakdown (and adding insult to injury, losing money on those investments) is unacceptable. “, she said, “and puts Colorado and PERA on the wrong side of the story.”