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Vermont looks at fossil fuel divestment for state’s pension funds
Authorities in the US state of Vermont are reportedly divided between those who support divestment from fossil fuel companies and those claiming that it would be better to engage with firms to push for better practices.
Senator Anthony Pollina has said that if the state recognised the urgency of climate change, public pension funds would not hold shares in the companies contributing to it.
“If in fact as a state we have a commitment to combating climate change, and if we have a commitment to moving toward renewable energy, it’s very contradictory that we would then be investing our dollars in fossil fuel industries that actually lead toward climate change”, he added.
If the bill being discussed was passed, Vermont’s public employee pension fund would divest from companies involved in fossil fuels extraction and production.
However, Vermont’s governor Peter Shumlin and treasurer Beth Pearce are not enthusiastic about the idea of dropping shares as a means of fighting climate change.
Shumlin said, “I believe that by keeping a seat at the table and by encouraging smart investments, we can make progress towards a cleaner, greener economy while still meeting our obligations to pay for the retirement of hard working municipal and state workers, as well as our state municipal and education workers, in the most responsible way for taxpayers.”
Meanwhile, Pearce added that by giving up holdings, “we give up our seat at the table and we may be replaced by shareholders that don’t have those values”.
The same argument has been brought to the table by other institutions such as Harvard University, whose president told students that engagement, rather than divestment, would lead to more changes.
However, leader of the divestment movement 350.org, Bill McKibben, told the Associated Press that any hopes of working with these companies would not be successful.
“The big fossil fuel companies have five times as much carbon in their reserves as any scientist says it would be safe to burn, and yet their business plan calls for them to burn it”, he wrote in an email.
“There’s been no sign, over the last 25 years, of them bending from this path, despite lots of appeals from people like [Pearce]. I think, given the timing of climate change, many have decided it’s time to actually act.”
Further reading:
Activists call on Canadian investors to ditch fossil fuels
San Francisco pension fund opts against fossil fuel divestment
Dutch town first in Europe to plan fossil fuel divestment