SF pension board must divest from fossil fuel investments
August 8, 2017
Photo: SKIP DICKSTEIN, Albany Times Union
THE POINT IS THAT NY IS TRYING TO DO THE SAME THING Rosedale, N.Y. town council member Jen Metzler, right, is joined by elected officials from across New York state during a press conference to release a letter from more than 200 elected officials across the state asking Comptroller DiNapoli to drop the $5 billion that the Common Retirement Fund invests in fossil fuels. Immediately following on President TrumpÕs decision to exit the Paris Climate Agreement, Local elected officials are rallying to defend action on climate change. Governor CuomoÕs strong commitment to climate action and NYC Mayor Bill De BlasioÕs announcement that New York will continue to honor the Paris agreement confirms that the imperative for bold climate action now sits in the hands of state and local elected officials. Monday June 5, 2017 at the State Capitol in Albany, N.Y. (Skip Dickstein/Times Union)
THE POINT IS THAT NY IS TRYING TO DO THE SAME THING Rosedale, N.Y….
President Trump’s abandonment of America’s global role on climate change means cities and states must lead the way. San Francisco can claim the mantle of leadership and set an example for the world by divesting its pension funds from fossil fuels.
Divestment is primarily a moral obligation. Burning fossil fuels causes global warming, which threatens the health, safety and prosperity of every American. With global temperatures rising dangerously toward a point of no return, the urgency of moral action is clear. This is poignant in San Francisco, where the sea level is expected to rise several feet by 2100, swamping entire sections of the city. No amount of financial gain from a stock could ever justify such destruction.
Fortunately, we have the technology we need to address climate change: clean energy. Clean energy sources such as wind and solar reduce harmful emissions that cause global warming. These clean energy sources boost the economy and create millions of good-paying jobs. When used to power electric vehicles, they also eliminate soot and smog-forming pollution from cars, buses and trucks.
The greatest challenge of our lifetimes — global warming — is also one of our greatest economic opportunities. That’s why fossil fuel stocks are a bad bet, and why the San Francisco pension board has a fiduciary responsibility to divest from them. Coal, oil and natural gas are industries in decline. They are shrinking because their products are quickly being rendered obsolete by superior technology. With wind and solar becoming cheaper every year, the trend will only continue. California is taking steps toward 100 percent renewable energy, and energy storage costs have fallen 73 percent since 2010 and are expected to drop another 75 percent by 2030.
The pension board is under pressure from the fossil fuel lobby to stick with their polluting products, but board members should heed reality: Divestment is the only fiscally responsible decision. Otherwise, the board is tying the fates of public employees in the most progressive city in the world to the fate of a dying dirty fuel industry whose harmful product will wreak destruction on our shores. This would cost San Francisco employees a lot of money in the long run.
A 2015 study by the financial firm MSCI found that investors who dumped dirty fuel stocks “earned an average return of 1.2 percent more” over a five-year period than investors who kept them. That’s why institutional investors like universities, churches and government entities are divesting from dirty fuels and investing in clean energy.
Let’s hope the San Francisco pension board has the wisdom and the courage to make the right call. A vote for divestment is a vote for a better, brighter future.
San Franciscan Tom Steyer spent 30 years as a professional investor and is the president of NexGen America.