New York City Announces Plan to Divest from Fossil Fuels
New York City Mayor Bill de Blasio and Comptroller Scott Stringer announced plans to divest the city’s five pension funds of approximately $5 billion in fossil fuel investments in an effort to safeguard the retirement plans of the city’s employees from the threat of underperforming assets. The total size of the retirement funds, $189 billion, makes New York City the largest American municipality to divest to date.
The Rockefeller Brothers Fund began aligning our endowment with our mission, making a divestment announcement in 2014, and the process continues with investments focused on creating positive environmental, social, and governance impacts. Stephen Heintz, president of the Fund, said that “the RBF is proud to stand alongside Mayor de Blasio and Comptroller Stringer in their historic commitment to divest the NYC pension funds from fossil fuels. In the void of federal leadership on climate, bold moves like this offer promise that the world can still win on climate.”
Valerie Rockefeller, chair of the board of trustees, noted that “as one of the early members of Divest Invest Philanthropy, a global coalition of foundations committed to divesting from fossil fuels and investing in the clean, equitable energy future, we have validated our decision with more robust returns, greater impact, and a clearer conscience. We welcome New York City to the movement.”
In light of the announcement by the city, Geraldine Watson, vice president of finance and operations at the RBF, reflected on the portfolio’s performance in the three years since the Fund’s own divestment began. “We compare the overall portfolio performance to a conventional benchmark, as well as one without fossil fuel companies. Since it is still early in the growing divestment movement, we look forward to studies that can demonstrate the financial impacts of divestment over a period of ten years or more. In the meantime, we are encouraged by the Fund’s performance to date, and the positive trend shown in comparisons with the sources for our portfolio benchmarks, the MSCI ACWI and the MSCI ACWI ex Fossil Fuels indices, in which the conventional benchmark lags the fossil fuel free since 2014.”
Recently, New York Governor Andrew Cuomo also announced plans to divest the state’s pension funds from its fossil fuel investments.
Associated Press: “NYC Sues, Divests From Oil Firms Over Climate Change” (January 10, 2018)
The Albany Times Union: “Cuomo is Right on Fossil Fuel Divestment” (January 4, 2018)