Climate Groups Urge DiNapoli to Reverse Last Year’s Decision Not to Divest from Large Gas and Oil Companies
Last Valentine’s Day, NYS Comptroller Tom DiNapoli shockingly reversed his commitment to divest the state pension fund from fossil fuels and announced that he was keeping billions in large gas and oil companies. Contrary to all other science and climate experts, DiNapoli showed his love for polluters such as Chevron, Shell, Occidental, Saudi Aramco, and BP by claiming that such companies were now committed to meaningful action to reduce greenhouse gas emissions.
Recent reports have concluded that global warming is accelerating much faster than expected. For more than a year the planet has exceeded the target of keeping warming below 1.5 degrees Celsius. Former NASA scientist James Hansen reported that even keeping warming below 2 degrees is pretty much dead, condemning life on the planet to catastrophic consequences as extreme weather is intensifying.
“As disturbing as DiNapoli’s decision was to keep billions in large fossil fuel companies, equally dismaying has been the refusal by State Legislators to challenge the Comptroller and protect the planet, pensioners, and taxpayers from unwise investments in companies driving climate change. Unfortunately, state lawmakers, especially the Governor and State Assembly, have fallen short – with a few exceptions – of the need to take strong climate action after passing the CLCPA five years ago,” noted Mark Dunlea of the Green Education and Legal Fund.
At the same time that DiNapoli was announcing his support for large oil and gas companies, the $230 billion Dutch pension fund, following a similar climate review process, decided to divest from almost all fossil fuel companies, concluding that most fossil fuel companies “are not prepared to adapt their business models” to the Paris climate accords. Christiana Figueres, the lead negotiator of the Paris Climate Accords, said she had given up any hope for fossil fuel companies having a positive climate impact. Two months before DiNapoli’s decision, the UN released a report that showed that the 20 major fossil fuel producers planned to produce 110% more fossil fuels in 2030 than would be consistent with limiting the degree of warming to 1.5C, and 69% more than is consistent with 2C.
Nearly a majority in both houses of the state legislature had sponsored divestment legislation developed by Divest NY. Lawmakers agreed to withdraw the legislation in exchange for a commitment by DiNapoli to follow the same process that the NYC Comptroller’s office had used to divest its three major pension funds from fossil fuels. Yet state lawmakers have refused to even hold hearings on DiNapoli’s findings that large gas and oil companies were now committed to meaningful efforts to curb emissions.
In addition to the devastating impact on climate by large gas and oil companies, fossil fuels remain a bad investment. Oil and gas stocks continued to fall behind the broader stock market in 2024, as outlined in a new report . The S&P 500’s fossil fuel components saw a 5.72% return in 2024, compared to the full index’s 25.02%. The fossil fuel sector has underperformed the S&P 500 in seven of the last 10 years, delivering the lowest performance and highest volatility of any S&P sector. Despite their recent record profits, driven by the war in Ukraine, declining oil prices have forced the companies to lay off workers, such as the recent 20% cut in its workforce announced by Chevron.
Exxon was the one large oil and gas company that DiNapoli had to admit was still bad on climate. But he insisted on continuing to invest more than $500 million in Exxon while only divesting $27 million in direct active investments in Exxon. DiNapoli argued that he had to keep money in Exxon since it was part of an index fund that he was passively invested in, an argument derided by climate groups who pointed out that DiNapoli could use index funds that exclude fossil fuel companies.
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