November 16, 2016

New York Deputy Comptroller Schools Rockefeller Fund on Pointless Nature of Fossil Fuel Divestment

In a newly surfaced video, one of New York State’s top financial officials has directly challenged the Rockefeller Brothers Fund over the pointless nature of fossil-fuel divestment, both in political and environmental terms.

“We’re not social investors,” New York First Deputy Comptroller Pete Grannis said during an Oct. 28 divestment forum at Baruch College. “We are investors that use our voice based on the best available economic information we can get and where we think we can have the best impact,” Grannis said, explaining why he supports shareholder engagement with fossil-fuel companies over divestment.

Grannis then turned to RBF President Steven Heintz and asked: “Who’s going to buy those shares that you are going to be divesting?” Later in their exchange, Grannis followed up: “What impact does that have on climate voting again?”

Public criticism from the New York Comptroller’s Office – which manages almost $180 billion in state retirement funds – is embarrassing enough for RBF, a leading supporter and funder of the fossil-fuel divestment campaign. But it’s even worse because Grannis has impeccable credentials as a climate advocate.

Before he became First Deputy Comptroller, Grannis was the Commissioner of the New York State Department of Environmental Conservation (DEC). In that role, he was one of the architects of a cap-and-trade program designed to limit greenhouse gases from power plants across the Northeast. The program, dubbed the Regional Greenhouse Gas Initiative, has been called “phenomenal,” “bold” and “ambitious” by the RBF-funded Natural Resources Defense Council. In fact, according to the Rockefeller Institute, Grannis has “over three decades of experience in shaping environmental and health policies in New York,” starting in the mid-1970s when we was first elected to the State Assembly.

In response to Grannis, Heintz with RBF claimed “our voice was amplified far more loudly by divesting” than through shareholder engagement. “The carbon-fueled capitalism that we have enjoyed for 300 years is obsolete and has to come to an end urgently,” Heintz continued. “And I think that’s the message, collectively, that we have to deliver.”

The exchange quickly became heated when an RBF-backed group – the Institute for Energy Economics and Financial Analysis (IEEFA) – raced to the defense of its funder.

“Pete, here’s the deal. Pete – no, no – you’re asking the wrong question and it’s an unfair question,” Tom Sanzillo, IEEFA’s director of finance interjected. Sanzillo went through a litany of complaints against the Comptroller’s Office and fossil fuel companies, including their opposition to New York Attorney General Eric Schneiderman’s climate-speech investigation.

And then he exclaimed: “Why don’t you start asking real questions and stop talking about bullshit!”

Clearly, the questions asked by Grannis about the effectiveness of fossil-fuel divestment struck a nerve. In fact, after the panel, the national communications coordinator for 350.org wrote that his comments against divestment “truly boiled my blood.” Not surprisingly, 350.org is also a major recipient of RBF grants.

But more than striking a nerve, the comments from Grannis were also prophetic. Less than two weeks after the panel, voters went to the polls and delivered divestment groups and other climate activists a stunning defeat. Green groups and other divestment proponents like California billionaire Tom Steyer spent huge sums trying to make the 2016 election about climate change. But it didn’t work. Many of the Democrats they supported lost, and voters put Republicans in control of the White House, Congress and 32 state legislatures.

RBF’s defensiveness and the angry overreaction of RBF-funded groups also show how much fossil-fuel divestment divides the environmental lobby. As the New York Times reported in May, many activists still support a strategy of engagement, where the ownership of shares gives them a say over how fossil fuel companies are run. On the other side are divestment groups, who believe they can demonize fossil-fuel companies by pressuring universities and pension funds to dump any investment that touches oil, natural gas or coal.

The same Times story lists Grannis’ boss, New York State Comptroller Tom DiNapoli, as another opponent of fossil-fuel divestment. “It’s great to say you’re for divestment,” DiNapoli said. “But if you get in your car and fill the gas tank on the way to the rally, it undercuts your argument.”

When climate advocates and Democratic officeholders in New York are willing to publicly rebuke the fossil-fuel divestment campaign, and the people who fund it, it shows you just how badly the campaign is losing.