Activists failed to capitalize on the global attention of the United Nations general assembly and global Climate Week in New York last week, with efforts to re-energize the debate over fossil fuel investments in the region falling flat. You may think it’s surprising since activists and New York City leaders would have you believe the city has divested from fossil fuels. The facts, however, are far different.
At the state level, Comptroller Tom DiNapoli — who makes final decisions about these types of things — continues to reiterate his anti-divestment stance, with POLITICO New York reporting:
“Comptroller Tom DiNapoli was at The Sagamore on Lake George yesterday and had a second to chat about the ‘decarbonization’ panel that was set up by Gov. Andrew Cuomo and the comptroller. Cuomo wants the pension fund to divest but DiNapoli prefers engagement with fossil fuel companies. DiNapoli said the panel continues to meet and there’s a chance they’ll report by the end of the year — but there’s no set timeline. ‘They’re very smart people,’ he said. ‘We’ll see what they recommend.’”
Meanwhile, despite claims to the contrary, New York City still has yet to make any real headway when it comes to divestment. Politicians like Mayor Bill DeBlasio paired up with activist Bill McKibben back in January to herald the fact that New York was the biggest city in the world to divest, but the facts tell a different story. More from POLITICO:
“DiNapoli also pointed out that the state pension fund has made the same progress on divestment as New York City — meaning, no progress at all. While Mayor Bill de Blasio and city Comptroller Scott Stringer have been praised for supporting full divestment, the five boards that actually control the city’s $195 million pension system have yet to actually approve divestment. Stringer and a mayoral representative sit on each board, but control a majority of none. The trustees must still vote on a divestment proposal, which isn’t scheduled to be released until later this fall.”
Comptroller DiNapoli has also remained consistent in how he views the empty gesture of divestment, stating in the Press Republican this week the merits of engagement over divestment:
“Some people have called for the state to divest completely from fossil fuel companies. DiNapoli said a more pragmatic approach is needed. ‘We feel we lose our voice if we’re not invested,’ he said.”
Despite this lack of progress, activists promoted divestment on several panels during the Climate Week events of last week. One panel discussion that featured representatives from activist groups like 350.org and the Center for International Environmental Law, sitting side by side with Comptroller Stringer, gave some background on how hard the groups had to push the City to move on the costly, ineffective policy of divestment.
According to Payal Parekh, Program Director at 350.org, activists and primarily 350 “had to push a lot” to get Mayor DeBlasio and Comptroller Stringer to sign off on divestment for NYC – even though the city has yet to make any actual divestments as a result — and is now using Stringer to push the state to divest (a likely useless effort based on DiNapoli’s comments to date). Stringer also highlighted the role activists play in helping him determine his priorities, noting “the role advocates and activists play in our country should not be underestimated.” Even Stringer has questioned the impacts of divestment but nonetheless gave into pressure to move the issue forward in the press, even if much remains to be seen at the pension level.
At another event cross town, the Divest-Reinvest Strategies Breakfast Briefing featured a number of speakers from California pension funds who highlighted their focus on engagement over divestment as an effective strategy. While comments from the Rockefeller Brothers Fund and Carbon Tracker Initiative repeated flawed arguments around stranded assets, the overall view of participants could not ignore that divestment is a largely limited tool that can go against the fiduciary duty of fund managers. And it’s not surprising.
According to the 2018 Responsible Investor Survey from RBC Global Asset Management of nearly 600 institutional asset owners and members and affiliates of Pensions & Investments, only 8.1 percent of respondents found divestment more effective than engagement, with the number coming in at only 6.7 percent within the United States. These numbers are consistent with the overwhelming rejections of divestment by pension funds across the country.
Bottom line: Despite what activists might want you to think, and dozens of events on the topic, divestment is failing to gain real traction in New York at the state and city level. Only time will tell if politicians in the state will look out for pensions and taxpayers in days ahead and continue to say no to this costly, ineffective effort.