This week, Rolling Stone published Bill McKibben’s latest attempt to publicize his troubled fossil fuel divestment campaign. However, anyone with even an inkling of what the divestment movement entails –and its serious limitations– probably couldn’t even make it half-way through. From failing to understand the legal obligations of city and state comptrollers, grossly inflating the movement’s successes, to unnecessarily denigrating companies that are effective allies in the global fight against climate change, Bill McKibben does himself and the divestment movement no favors in this piece.
Here’s a breakdown of some of his most outlandish claims:
It is true Tom DiNapoli has resisted calls for the New York State pension fund to divest. But it’s not a question of “his nerve” but, rather, his legally-mandated fiduciary responsibility—that is, his obligation to focus solely on increasing returns for pensioners not using their retirement savings as a political football. In his own words:
“My fiduciary duty requires me to focus on the long-term value of the Fund. To achieve that objective the Fund works to maximize returns and minimize risks. Key to accomplishing this objective is diversifying the Fund’s investments across sectors and asset classes—including the energy sector, where fossil fuels continue to play an integral role in powering the world’s electricity generators, industry, transportation, and infrastructure.”
New York City’s Comptroller, Scott Stringer, is subject to the very same fiduciary responsibilities, which is why when he and Mayor Bill de Blasio announced the city’s divestment it came with a (significantly less publicized) caveat — the city will divest only if it is consistent with the fund manager’s fiduciary duties. As we all know, divesting is known to create new costs and financial risks, which is why less than a month later Politico reported that New York City’s divestment had not made much headway with the city pension boards:
“Four of the five boards representing the city’s roughly $191 billion pension fund system met to vote on a resolution to begin studying the fiscal implications of divesting from companies that own fossil fuels. Only one board — the NYC Employees Retirement System — voted to pass the resolution.”
It’s a safe bet to assume that both Mayor de Blasio and Comptroller Stringer knew that the pension boards could not legally prioritize political gestures over pensioners’ returns, but that such a divestment announcement—no matter how empty it is—could generate headlines. In turn, McKibben in his recent Rolling Stone piece lavished them both with praise for setting an example that DiNapoli should follow even though not one dollar has been divested from NYC’s pension funds.
Again, not quite. The University of California system’s “divestment” consisted of them taking some money out of fossil fuel companies and then reinvesting it in transmission lines and utilities so they could retain their exposure to the fossil fuel industry and appease activists at the same time. This is a well-worn concept. Back in 2015, divestment advocates even admitted that they advise their clients to drop their shares in fossil fuel companies but then just reinvest those funds in bonds of countries that have economies closely aligned with the energy sector, like Russia or Norway, so they can say they “divested” but don’t suffer the cost of actual divestment.
As for the universities in the UK that signed the pledge to dump all the fossil fuel stocks in their endowments, nowhere does McKibben mention that a significant portion of these schools don’t have endowments to begin with. As the Times Higher Education reported, Canterbury Christ Church University, University of Chester, University for the Creative Arts, University of Cumbria, Newman University, Wrexham Glyndwr University, York St John University, Writtle University College and the University of Winchester have all signed a pledge to not invest in fossil fuels — even though none of these universities have endowments to begin with.
McKibben spends a great deal of his op-ed promoting the false dichotomy that it is fossil fuel companies vs. renewables. At this point, one can only assume that he is being willfully ignorant about all the research that the world’s largest oil and gas companies are doing to advance alternative energy sources —it’s pretty well-known. In fact, the literal billion dollars (with a B) pouring into hundreds of green energy projects each year has been covered in media outlets spanning from Bloomberg to CleanTechnica. But hey, when your career revolves around jet setting around the world to carbon-shame these companies this can be quite the inconvenient truth.
Bottom Line: Taken in isolation any of these misstatements are enough to make you wonder what’s really going on with the fossil fuel divestment movement. But when taken all together you just have to ask if this is a story of facts or attention grabbing.