DiNapoli’s Climate Action Plan Opposes Divesting Pension Funds from Fossil Fuels
Comptroller’s Go-slow approach to climate risk threatens state’s investments
Mark Dunlea, the recent Green Party candidate for State Comptroller, said today that he was disappointed that Tom DiNapoli plans to continue to invest more than $11 billion in Exxon and other fossil fuel companies.
Dunlea said DiNapoli’s Climate Action Plan was an even less aggressive approach to managing climate risk in the state pension fund than recommended by the Comptroller’s Advisory Decarbonization Panel, which called for a 2030 goal to eliminate climate risky investments. Dunlea did support DiNapoli’s adoption of the target of keeping global warming below 1.5-degree C. However, as DiNapoli noted, many of the steps in the climate action plan are merely continuation of existing policies.
“Mr. DiNapoli is delusional when he advocates that fossil fuel companies like Exxon ‘provide the greatest investment opportunities because, in the face of significant uncertainty, they have the ability to adapt to provide climate solutions.’ The clearest solution to climate change is to halt the use of fossil fuels. These companies are doing the opposite, investing tens of billions annually to search for even more fossil fuels to burn. DiNapoli continues to want to talk rather than act,” stated Dunlea.
Dunlea said it was time for the Assembly to stop protecting DiNapoli, a member of the Assembly when he was appointed by the legislature to be comptroller. Climate activists want divestment included in any climate deal agreed to be lawmakers and the Governor this year.
The Decarbonization Panel members were handpicked by the Comptroller to reinforce his strategy of shareholder engagement with fossil fuel companies despite a half-century of failed efforts. The Panel however did recommend that the Comptroller better manage the climate risk from pension investments, starting with dumping thermal coal stock by 2020 and implementing a plan to eliminate climate risk from the portfolio by 2030. DiNapoli instead intends to implement a slower and less comprehensive approach without firm deadlines.
“Tom does adopt a number of the panel’s recommendations related to engagement with companies but does not establish climate performance standards that the companies must meet or adopt the target date of 2030 – which itself is too late,” added Dunlea.
The panel said that it “believes that climate change poses significant risk to the Fund’s investment portfolio…as most (if not all) do not currently adequately price climate-related risk…. The first step need to be to increase the Fund’s resilience to climate change. The Panel recommends the Fund pursue alignment of its entire portfolio with a 2-degree or lower future by 2030 in accordance with climate science consensus.”
DiNapoli continues to ignore the mounting evidence that investments in fossil fuel stocks are increasingly risky, underperforming the rest of the stock market over the last 5 years. A prior report showed that if the state had divested a decade ago when DiNapoli was first appointed comptroller, the pension fund would have an extra $22 billion today. More than 1,000 institutions worldwide with more than $8 trillion in assets have agreed to divest from fossil fuels since 350.org started the campaign five years ago.
DiNapoli argues that “divestment is a last resort and should be reserved for specific investments (and not the fossil fuel industry generally) where there is an articulable, serious, and sustained financial risk to continuing the investment and where an economic analysis demonstrates that divesting would not have a negative economic impact on the CRF. At this time, broad-based fossil fuel divestment by the CRF is not consistent with the Comptroller’s fiduciary duty, and would not be effectual for either risk reduction or broader climate change mitigation.”
“The IPCC says the world has 11 years to save life on the planet by ending the use of fossil fuels. DiNapoli wants New York to spend that time talking to Exxon while investing billions of dollars to fuel climate catastrophe,” noted Dunlea.
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