Tumblr Icon RSS Icon

Seattle Mayor Calls For Divesting City Pension Funds From Fossil Fuels

Posted on

"Seattle Mayor Calls For Divesting City Pension Funds From Fossil Fuels"

Share:

google plus icon

After a 21-city tour educating people on a new fossil fuel divestment campaign, climate activists are starting to see results.

In the last month, groups on 192 university and college campuses have organized campaigns to pull their schools’ endowments out of the fossil fuel industry. One small school, Unity College, has already committed to divesting from coal, oil, and gas. At Harvard, a school with the country’s largest endowment, 72 percent of students voted in favor of divesting from fossil fuels. Although Harvard officials balked, a group of student activists has kept the pressure on.

There’s another big piece of news on the divestment front this week. Seattle Mayor Mike McGinn is now calling on his city to strip fossil fuels from its two main pension funds. According to the city’s finance director, Seattle has $17.6 million invested in Chevron and ExxonMobil, as well as smaller investments in other oil and gas companies. Mayor McGinn sent a letter to the city’s pension fund managers on Friday calling for them to move their money elsewhere:

To the members of the Seattle City Employees’ Retirement System Board:

I write to you today to ask that you refrain from future investments in fossil fuel companies and begin the process of divesting our pension portfolio from those companies. I recognize that this process will require a thorough evaluation of the portfolio’s performance, assets, and investment strategies. City staff stand ready to assist you in this work.

Climate change is one of the most important challenges we currently face as a city and as a society. We have watched in recent weeks as weather influenced by climate change has caused significant damage and financial losses to cities and states on the East Coast. The projections suggest that the problem could get much worse. According to Bill McKibben and 350.org, fossil fuel corporations now have 2,795 gigatons of carbon dioxide in their reserves, five times the amount considered safe to avoid catastrophic climate change.

I believe that Seattle ought to discourage these companies from extracting that fossil fuel, and divesting the pension fund from these companies is one way we can do that. The City’s cash pool is not currently invested in fossil fuel companies, and I already directed that we refrain from doing so in the future. In addition, I am asking the Deferred Compensation Plan Committee to develop options for City employees to allow them to move their investments out of fossil fuel companies if desired, and to offer fossil fuel free investment choices to them refrain from future investments in fossil fuel.

The City of Seattle’s finance director informs me that two of the system’s top 10 investments are with ExxonMobil and Chevron. The pension system has currently $17.6 million invested with these two firms, which represents roughly 0.9% of the system’s $1.9 billion in assets. I understand that it is likely the system has investments in other fossil fuel-related entities as well.

There is a clear economic argument for divestment. While fossil fuel companies do generate a return on our investment, Seattle will suffer greater economic and financial losses from the impact of unchecked climate change. Our infrastructure, our businesses, and our communities would face greater risk of damages and losses due to turbulent weather that climate change causes. As a waterfront city, several of our neighborhoods and industrial districts are at risk if climate change causes a significant rise in sea level.

I believe that Seattle’s pension funds should be invested in companies that can provide a good return on our investment without putting our city and our future at risk. I am ready to work with the City Council and the pension board to make this happen.

Sincerely,

Mike McGinn
Mayor of Seattle

This is the first time a city official has called for pulling money out of fossil fuels since the divestment campaign began. The strategy, organized by 350.org and promoted by a slew of other environmental groups, is modeled after a campaign in the 1980′s that pressured South Africa into abandoning apartheid. While the South Africa campaign was effective in forcing an end to the country’s racial segregation policies, the fossil fuel campaign is meant as more of symbolic gesture to “strip the social license” of fossil fuel companies exacerbating climate change.

« »

12 Responses to Seattle Mayor Calls For Divesting City Pension Funds From Fossil Fuels

  1. Kevin says:

    And now I’m back on his side!

  2. catman306 says:

    Perhaps, further along, all climate aware investors will pull their money out of fossil fuel industries and place it with renewable clean energy sources: solar, wind, geothermal and tidal.

    Just another Christmas wish…

  3. What’s exciting about this — apart from a very succinct, well-argued case — is that it take the divestment campaign out beyond colleges and universities.

    I’ve been delighted with 350.org’s work on campuses, both for the message it sends to the investment community and the voice it helps students create for themselves. Extending that activity to municipalities opens up an organizing opportunity for the rest of us, working at a level of government that has long been at the forefront on climate.

    Let’s see this expand in 2013! (Have you called your city councillor this week?)

    • Jane Mcguire says:

      I agree that Seattle’s action is important because it extends the movement beyond college campuses. As a Baby Boomer, I’m not especially connected with my alma maters. Nor do I think that the younger generations should bear full responsibility for healing the planet that my generation has trashed.

      Personally, I’d rather organize at a grassroots level than do letter writing to elected officials. I’m proud to live in Seattle and inspired by our Mayor. Next question: what more can I do?

  4. Mike Roddy says:

    Good for Mike McGinn. Seattle residents will support him, and let’s see if other cities follow.

    UC Berkeley, my old school, has lost its way, partly by accepting a big share of a $500 million research grant from BP a few years ago. It would be cool if they decided to divest anyway, and the student body would support them. This would be a stronger gesture by virtue of biting the hand that has fed them.

    Pulling it off will be very tough, due to UC’s public charter and typical members of the Board of Regents, but students should at least try. It would go a long way toward restoring hope.

    Back in the day, Berkeley students stopped troop trains on their way to Vietnam, and spent years during that war being beaten and teargassed- and, occasionally, shot (as I was). The least they can do now is accept the sacrifice of maybe giving up a basis point or two from the university’s portfolio.

    • BobbyL says:

      I think divestment will be hard to achieve at state schools. Can’t see it happening in Pennsylvania. The state has bet its economic future on fracking. They even passed a law allowing fracking on campuses of the state schools. Penn State’s Board of Trustees includes members from industry and the governor is a member. And the state colleges and state-assisted schools like Penn State, Temple and Pitt receive money from the state legislature which might not take kindly to divestment. Similar concerns would seem to apply in states that have fossil fuel drilling or mining such as Texas, Colorado, West Virginia, Wyoming, North Dakota, Arkansas, Kentucky, Illinois, Oklahoma, etc.

  5. Jane Mcguire says:

    I agree with Mitchell’s point: Seattle’s action is important because it extends the eco-divestiture movement beyond college campuses. Climate change is bigger than Vietnam, which mainly mobilized young people. Here, we need everyone of all ages. Seattle currently subsidizes in-home energy audits (my job) where people learn how to reduce their carbon footprints. Everyone can do something, and I’m proud that Seattle is helping us see the way.

  6. Sailesh Rao says:

    Also, I’m told that it is incorrect to claim that divestiture caused the South African government to negotiate with the African National Congress. There were numerous pressures on the Apartheid regime, but according to some of my friends in South Africa, it was the declaration of the World Alliance of Reformed Churches that Apartheid is a Heresy that made it untenable for the regime to continue. The Dutch Reformed Church finally denounced Apartheid to be a Heresy in 1998, 4 years after Nelson Mandela became President, and it was finally admitted back into the World Alliance of Reformed Churches.

  7. Matt Owens says:

    I’ve recently written to Teresa Sullivan, who is the President of my alma mater – the University of Virginia – and told her that I won’t be giving any contributions until they divest from fossil fuels. How can we invest in a university that is investing in our destruction? (plus, UVA has one of the biggest endowment funds of any university.)

    -Matt, (UVA ’06) studio art and climate science

  8. Rob Harmon says:

    It appears Hampshire College has also divested from fossil fuel companies.

    https://www.commondreams.org/headline/2012/11/08-9