Published on May 7th, 2019 | by Carolyn Fortuna0
Fossil Fuel Complicity No Longer Hidden Behind ‘Fiduciary Duty’
May 7th, 2019 by Carolyn Fortuna
They’re not giving up. Yes, several attempts were defeated to persuade the Massachusetts municipal and county retirement systems to remove fossil fuel investments from their portfolios. But the Massachusetts Legislature is still considering measures that open up possibilities for divestment. To do otherwise, they argue, is to engage in fossil fuel complicity.
And they’re not alone. All over the US, organizations are pushing for divestments within institutions and municipalities. Led by FossilFree.org, individuals and advocacy groups are raising the discourse around the necessity to stop and ban all new oil, coal, and gas projects by passing local resolutions to divest and by building community resistance.
Divestment has been a tool used to promote social change since at least the 1970s, when anti-apartheid activists urged institutions to move their investment dollars away from companies that did business with South Africa. Fossil fuel divestment has been gaining momentum in recent years, with more than 1,000 institutions pledging to remove $8.55 trillion from investments in the fossil fuel sector.
Fiduciary Duty is Now a Companion Argument to Social & Environmental Reasons to Divest
In 2017, Somerville, Massachusetts’ governing board agreed to move $9.2 million — 4.5% of the total invested funds — out of fossil fuel investments. The regulatory body that oversees public pension systems rejected the move, however, with reasons ranging from procedural to breach of fiduciary duty. The Massachusetts Public Employee Retirement Administration Commission (PERAC) claimed Somerville was failing to put the financial needs of its beneficiaries ahead of social and environmental causes. PERAC oversees 104 public pension plans across the state, with about $86 billion in total assets.
However, 2 counterarguments quickly made that position untenable.
- Demand for fossil fuels is likely to drop as much of the global economy shifts to renewable energy.
- Increased storm frequency due to climate change can cause supply chain disruption and infrastructure damage for oil companies.
“From the fiduciary perspective, there are a lot of questions as to the economic health of the fossil fuel sector moving forward,” Alex Nosnik, a member of the Somerville board, said. “Risk, certainly in concert with the environmental and social issues, was driving our decision to move forward.”
Ultimately, after lots of divestment advocates worked alongside sympathetic legislators to craft a local option bill that would authorize any municipal or county retirement system to divest from fossil fuels should they so choose. Standalone bills have been filed in the House and Senate; similar language has also been included in a wide-ranging clean energy bill pending in the Senate.
Several of the state’s environmental groups have come out in favor of these measures, including the Massachusetts chapter of the Sierra Club, the Green Energy Consumers Alliance, and the Climate Action Business Association.
“We have to stop putting money into fossil fuels,” said Deb Pasternak, director of Sierra Club Massachusetts. “We need to take our money and direct it toward the renewable energy economy.”
Bank’s Fossil Fuel Complicity Leads to Divestment Awareness
JPMorgan Chase is one of those corporations that puts on a good public face due its various sustainability pledges. It is on course to power 100% of its corporate operations with renewable energy by 2020. It has dedicated $200 billion for clean energy and green technology projects by 2025. Its CEO Jamie Dimon endorses a carbon tax and has been vocal in disagreement with the Trump Administration on US withdrawal from the Paris Agreement.
But all that feel-good hype wasn’t enough for 350 Massachusetts, a local grassroots climate activist group, when a new Chase Bank in Boston’s Downtown Crossing opened recently, according to reports from WBRU.
Protesters’ signs called out the corporation that funds more oil and gas exploration in the fragile Arctic than any other investor with slogans like “#1 Funder of Climate Disaster” and “Toxic Assets.”
The 2019 Fossil Fuel Finance Report Card points out that JPMorgan Chase was, indeed, the leader in fossil fuel complicity projects between 2016 and 2018 with $196 billion expended. Wells Fargo was a distant second with $156 billion. And JPMorgan Chase supports more ultra-deepwater oil and gas development and coal mining and liquefied natural gas than any other investor.
If you want more evidence, just look at Chase’s top US bank track record on tar sands development. With enormous amounts of fresh water needed to extract bitumen, a viscous low-grade crude, tar sands oil is a particularly greenhouse gas-intensive fuel. The toxic tailings end up in ponds, and tar sands projects in Canada and elsewhere have devastated vast tracts of boreal forests that were natural carbon sinks and habitat for threatened wildlife.
The protesters at the new Chase branch in Boston were asking customers to cut up their Chase credit cards, to switch their accounts to other banks, and to contact Chase’ corporate audience about their dismay.
Divestment efforts continue to challenge fossil fuel complicity around the US and the globe.
- The drive by climate change activists to require New York state’s largest state pension fund to divest its fossil fuel portfolio is picking up momentum in Albany, despite the reported opposition from several public employee unions worried that such an action would weaken the fund’s bottom line. The Fossil Fuel Divestment Act, sponsored by State Sen. Liz Krueger and Assemblyman Felix Ortiz, would require State Comptroller Thomas P. DiNapoli to divest the state’s holdings in 200 of the largest fossil-fuel corporations over the next 5 years, with a more expedited sell-off for poorly performing coal-company stocks.
- 350.org continues its effort to bring awareness to fossil fuel complicity and the need for divestment. It is joining other advocacy efforts to demand HSBC stop profiting from death and destruction of people and the planet.
- In March, the government of Norway announced a recommendation for the Norwegian Sovereign Wealth Fund, worth $1 trillion, to divest more than $7.5 billion of holdings from upstream oil and gas industries. This proposal will next be put to a parliamentary vote.
- Nearly six years after Middlebury College rejected a push to divest, the college announced that it will slowly draw down fossil fuel holdings in its $1 billion endowment. A spring 2018 student referendum that found about 80% of students in favor of divestment — and a faculty referendum last fall with 98% approval — showed strong campus engagement, which prompted the evolution of divestment on campus.
An area where campaigners have recently begun to have marked successes is divestment. Most fossil fuel companies, they argue, have little concern for future generations. Rather than focusing on market pressures and fiduciary duties involved in running public companies, we need to advocate for the long view of investments that compel behavioral norms to favor the earth and environment.
Follow CleanTechnica on Google News.
It will make you happy & help you live in peace for the rest of your life.