“The notion that we’re going to lead the fight on climate change by making the pension fund sell all their energy stocks to me seems like not the smartest strategy. We prefer to be an investor and we engage with companies. We would lose that leverage if we’re not at the table anymore as an investor.”
– New York Comptroller Tom DiNapoli
Making his first public statement since New York Governor Andrew Cuomo’s State of the State address, State Comptroller Tom DiNapoli has once again denounced fossil fuel divestment, further distancing himself from the governor’s plan and divestment proponents in the state and New York City.
During an address last week, Gov. Cuomo briefly mentioned his plan to divest the state’s $200 billion pension fund of fossil fuel stocks. He commented:
“We call to an end to any investment in fossil fuel related activities in the pension fund. The future of the environment, the future of the economy and future of our children is all in clean technology and we should put our money where our mouth is. Let’s give the Comptroller a big round of applause and thank him for all of his hard work.”
But in an interview on Tuesday, Comptroller DiNapoli made clear his stance on the issue. During an interview with Hearst Media, DiNapoli reiterated, as he’s done before, that divestment is ineffective:
“The notion that we’re going to lead the fight on climate change by making the pension fund sell all their energy stocks to me seems like not the smartest strategy,” DiNapoli said during his remarks. “We prefer to be an investor and we engage with companies. We would lose that leverage if we’re not at the table anymore as an investor.”
DiNapoli also mentioned his desire to keep politicians out of the divestment debacle. As he told the Albany Times-Union, the state legislature is the “last group” he wants dictating investment decisions because “the political forces would be dangerous.” DiNapoli was also sure to emphasize that he is an independently elected official, indicating that he is capable of making his own decisions, and “that will not be compromised.”
A new report shows that New Yorkers side with DiNapoli on the divestment debate. According to a recent study conducted by the Spectrem Group, 88 percent of national pension respondents and 79 percent of New York City pensioners prefer managers steer clear of using their retirement funds as a political pawn – instead focusing on growing returns. It’s a justified concern considering a December study by the Suffolk County Association of Municipal Employees that found New York’s state pension fund would lose an estimated $2.8 billion over 20 years if it opted to divest. In New York City, a report from Prof. Daniel Fischel of the University of Chicago Law School also finds the New York City Employee Retirement System (NYCERS) would suffer between $502 and $692 billion in lower returns over 50 years due to divestment. The annual impact for NYCERS ranges between $41 and nearly $60 million.
In New York State, Cuomo and DiNapoli will undoubtedly need to work together on this issue. But, DiNapoli as the sole person in charge of the pension fund’s investment strategy has made it clear that he has no plans to divest. He has repeatedly stated that his job is to ensure the pension fund is “well-funded.”
Based on the numerous reports that have demonstrated just how costly divestment is, it is unlikely the comptroller will change his mind any time soon. Let’s hope the fiduciaries of other pensions across the country follow suit.