Comptroller Decarbonization Report Provides Justification for Divestment

Dunlea Calls on Comptroller DiNapoli to Divest NY Pension Funds from Fossil Fuels Following Release of Decarbonization report

Mark Dunlea, the recent Green Party candidate for State Comptroller, says the report released today by the State Comptroller’s Decarbonization Advisory Panel lays the groundwork for the state to divest its $210 billion plus pension fund from fossil fuels.

The panel says due to the growing threats posed by climate change, the state by 2030 should move 100% of its funds into sustainable investments. It also calls to divest from coal related funds by 2020.

“This study provides ample justification for the Comptroller to announce that he plans to divest the pension fund from fossil fuels. This is Mr. DiNapoli’s opportunity to be a national climate leader and to act to help save the future of humanity, while protecting our financial assets,” stated Dunlea, chair of the Green Education and Legal Fund.

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.

Many of the members on the panel appeared to have been selected based on their support for the shareholder advocacy efforts favored by the Comptroller rather than divestment. The report avoids stating direct support for divestment.

Bevis Longstreth, the former SEC Commissioner on the panel, noted that “the risk of the Fund of being too early in decarbonizing is far less than the risk of being too late. And the time is fast approaching when holding FF-Dependent Companies will be as imprudent as holding whale industry stocks was after kerosene replaced whale oil for lighting…We speak of the risk of permanent loss of capital from this accelerating energy transition and its accompanying disruption….The risks of remaining invested in FF-Dependent Companies, including coal, oil and gas companies and other industry sectors especially impacted by the energy transition, like capital goods, transport and automotive, are today large and growing larger swiftly.” (Appendix A)

Longstreth was also critical of the idea that shareholder advocacy would alter the negative climate actions of fossil fuel companies. “This kind of shareholder advocacy has a poor record where the policy changes sought materially affect management’s compensation or power, or the core of the corporation’s business….In the case of the oil majors, where exploration and sale of fossil fuel is central to their business model, engagement is hard to justify. The long record of efforts by the oil majors to mislead the public, while seeking to defeat governmental action against climate change makes justification even harder.”

The NYS Senate will hold a hearing of divesting the state pension funds from fossil fuels on April 30. Sixty-five state lawmakers are sponsoring legislation (A1536 / S2126) to divest the state pension funds from coal within one year and the largest 200 oil and gas companies within five years.