Letter to Speaker Heastie Urging Him to Bring Fossil Fuel Divestment Bill to a Vote

Dear Assembly Speaker Heastie:

We represent a wide range of community, faith and environmental organizations throughout New York.

Climate change represents a severe threat to the well-being of our state’s residents. We appreciate your efforts to have the State Assembly provide leadership in taking action on climate change.

One critical step we urge you to take is to ensure a vote this session on the legislation (A8011A – Ortiz) to divest the state pension fund from fossil fuels.

The bill has already been reported out of the Senate Civil Service and Pension Committee.

The State pension fund should not be invested in companies that contribute to catastrophic climate change that has already inflicted tens of billions of dollars’ worth of damage in NYS, starting with Hurricane Sandy.

According to NYS OSC, the NYS Common Retirement Fund, with an estimated value of $160 billion, has $5.12 billion invested in the top 200 Carbon Underground fossil fuel corporations, including a billion dollars in Exxon.  These publicly­ held companies own the vast majority of fossil fuel reserves underground­­ and their stock prices and business plans depend on digging up and burning these reserves.

The international scientific consensus is that we must keep 80% of the existing fossil fuels in the ground to avoid catastrophic climate change. If it’s wrong for these companies to wreck the planet, then it’s wrong to profit from that wreckage.

The bill would immediately freeze any new investment by public pension plans in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.  This legislation would divest from coal within one year – something California has done and NYC is doing.

Since 350.org first proposed divesting the New York State Common Retirement Fund from fossil fuels 3 years ago, the decision not to divest has cost the fund at least $5.3 billion, according to a report from Corporate Knights, an investment research company

The State has a fiduciary responsibility to protect the retirement funds of public workers from risky investments. Investing in fossil fuels poses increasing financial risk and loss to the CRF, thus its beneficiaries.

The State Comptroller has resisted divestment, arguing for shareholder advocacy instead. Certainly it is helpful to use the voting rights of the pension system to move companies to adopt more environmentally responsible practices. The comptroller should continue to lead shareholder advocacy campaigns to set greenhouse gas emission goals, improve energy efficiency across operations and source more renewable energy. But, there is an inherent conflict of interest for investors to advocate that coal, oil and gas companies stop the production of fossil fuels given that it is their core business. Shareholder advocacy is not an effective tool for changing the overall orientation of industries whose business models depend on producing fossil fuels and would not even be allowed under SEC regulations.

The Intergovernmental Panel on Climate Change (IPCC) has released multiple reports that find climate change is causing dangerous and costly disruption of human and natural systems including the melting of Arctic ice, a rise in ocean acidity, a rise in global mean surface temperatures, the retreat of glaciers, an increase in extreme storm events, drought, increasing threat to global water and food supplies, loss of biodiversity and increasing risk of civil hardship, warfare and refugee dislocation.

Please act to protect our state from climate change and bring the fossil fuel divestment bill up for a vote. Thank you for your consideration.