Last week, the new numbers for fossil fuel divestment were announced during the U.N. Climate Conference in Paris. After the press conference, there was a panel discussion in the "Climate Generations" space at COP21, open to the public. I went to watch speakers from throughout the divestment movement announce that there are now commitments of over 500 institutions representing over $3.4 Trillion in assets under management. Cities in Norway, Sweden, and Germany have been added to the list, along with Allianz, Europe’s largest insurance company.
At the press conference, Kevin De León from the California State Senate spoke about making California the first state to pass divestment legislation. One of the highlights of the event was poet and Pacific Climate Warrior Kathy Jetnil-Kijiner's live performance describing the determination to save her islands. Only about three years old, the fast growing divestment movement is a sign of hope the world is ready to turn its back on fossil fuels and maybe even to do it quickly enough to make a significant difference for those most vulnerable.
As a proud resident of New York State, I am looking for an indication that our elected officials understand that there is no time to waste with half-measures and political distractions. New York State Comptroller DiNapoli has the political power, right now, to announce that he is adding over $180 Billion to the divestment commitment number. Until he makes that decision, New York State will lag behind responsible investors around the world.
The Comptroller could have made this announcement in Paris last week, sending a significant message to world leaders in the negotiations, financial markets and policy makers worldwide that the age of fossil fuels is ending. Instead, he made a different announcement, one he may have thought would please divestment supporters in his state.
The Comptroller moved $1 billion of the state’s $180 billion investments into a $2 billion low carbon index, in collaboration with Goldman Sachs Asset Management. The index will reduce emissions profile of the sum by up to 70 percent and New York State's sustainable investment profile to $5 billion.
This kind of “step in the right direction,” may have worked well for him if the climate crisis were not so advanced. At this moment in history, low-carbon investments which retain investments in fossil fuel companies fail because they do not "pick a side" and ignore the imperative to keep fossil fuels in the ground. His initiative includes only 2.8 percent of the state's investment portfolio and does not entirely remove investments from any specific company. In other words, we are still shareholders in Exxon, the corporation that we now know has known about the disastrous outcome of their business plan for over 40 years and has been actively working to obstruct climate justice ever since.
There is a reason for hope and cautious optimism about both the Comptroller’s trip to Paris and his move towards low carbon investments. It shows that he recognizes that we are watching him and that he knows he is in a unique position to turn the tables on this catastrophe.
Perhaps when the Comptroller was in Paris, he met some of the thousands of people here who represent small island stands, climate vulnerable nations, and youth not giving up on a future.
The mantra of these and many others both in the talks and on the streets this week has been “1.5 to stay alive,” referring to the need to keep warming at 1.5 degrees, instead of the previously agreed upon 2 degree limit. The messages of those facing climate change is - keep it in the ground and move to 100% renewables by 2050. Many of those who have come to Paris are in a desperate race to save the lives, families, and cultures threatened by rising seas, droughts, violence and other climate impacts. The divestment movement, in solidarity with these communities, asks investors to draw a hard line and signal a complete reversal of our energy economy.
Shifting some funds to low-carbon investments is not enough. While divestment is not going to address climate change on its own, it is a vital piece of the puzzle. We cannot expect governments to take on bold new policy decision affecting fossil fuel companies when they are literally invested in the old way of doing things.
Until Comptroller DiNapoli announces a commitment to divest from all oil, gas and coal companies within five years he will remain on the wrong side of history. Meanwhile, New York City Mayor Bill de Blasio has called for coal divestment of the New York City funds. Democrats in New York, led by State Senator Liz Krueger and Assemblymember Felix Ortiz, are lining up to support the Fossil Fuel Divestment Act. If this act passes in the upcoming legislative session, the state would follow in the footsteps of California Democrats who voted to divest from coal. The New York legislation would include oil and gas companies, a fact crucial in a state determined to take a stand against fracking and natural gas infrastructure.
The divestment movement seeks a definitive answer about where our government stands when it comes to subsidizing fossil fuel companies, aligning ourselves with climate deniers, and whether we support fossil fuel infrastructure or renewable infrastructure. If the Comptroller were to choose the side of the people, he can make an enormous political impact. There are also sound financial reasons to divest. Exposure to the fossil fuel sector presents a systemic risk for the New York Common Investment Retirement Fund. California pension funds lost some $5 Billion on fossil investments according to recent reports.
The question remains as to whether Comptroller DiNapoli recognizes that his position as sole trustee gives him an opportunity to make an enormous impact in the desperate fight to keep fossil fuels in the ground.
As the world watches the negotiations wrap up in Paris this week it is clear there is no time for hesitation or distractions. Shifting some investments away from the worst companies is not a replacement for divestment.