Global Courant
I remember sitting with a Church of England finance director in a luxurious London office more than a decade ago. The organization I co-founded, 350.org, had just launched its fossil fuel divestment campaign, and we encouraged Anglicans to get involved, as Exxon et al helped lead Genesis in reverse. He looked at us, shook his head, and explained that he had a much better route: “Engage” with the oil companies to get them to change their practices.
Ten years later, the world is much hotter, the seas have risen significantly, and Big Oil is as steadfastly committed to its business model as ever. Last Thursday, the Church of England threw in the towel on getting engaged. It announced that it would sell all of its oil and gas investments because, even with making their goals clear to the companies and with the continued application of prayer, the big companies had done “nearly enough” to averting a spreading climate catastrophe. .
Scientists and environmentalists also started talking to California’s big pension funds, CalPRS and CalSTRS, 10 years ago, and they got the same answer: We’ll keep our stock and go with the oil companies. The funds’ efforts to change those companies have been no more successful than those of the Anglicans: Big Oil is expanding its drilling operations and cutting back on even token efforts in renewable energy. And so it’s time for CalPRS and CalSTRS to divest as well.
There is every reason for these public pension funds to get their money from fossil fuels. California has been hit as hard as anywhere in the developed world by the climate crisis. The past 10 years have seen many droughts, floods and fires in the Golden State. And another thing — by holding those stocks, California has cost itself a lot of money.
In fact, one recently published report of the University of Waterloo, in Ontario, Canada, in collaboration with Stand.earth, found that CalPERS lost $4.7 billion over the past decade, or $3,163 per retiree, by remaining invested in fossil fuel, and that the smaller CalSTRS in managed to lose $4.9 billion, or an astonishing $5,114 per beneficiary.
That’s because fossil fuel is not only actively bad for the planet, it’s also actively bad for its shareholders. It’s underperformed other asset classes dramatically over the past decade, and for an obvious reason: a new industry has emerged, renewable energy, providing the same product, only cheaper and cleaner.
Big Oil did manage to make money over the past 18 months, thanks entirely to Vladimir Putin’s invasion of Ukraine, but as the new report shows, that provided pension funds with only a meager profit margin during that period and came nowhere near not good. for the losses of the past ten years. Looking ahead to the next 10 years (and looking around the California landscape), what seems like the wisest guess – that the world will continue to burn hydrocarbons or that it will do everything it can to do something smarter?
It’s actually relatively easy for the Church of England and California pension funds to make this decision now because so many have led the way. Nearly every elite university – the UC system, Harvard, Princeton, Oxford, Cambridge – as well as major public pension funds in New York State, Quebec and the Netherlands have divested. Proponents of full or partial divestment have included Barack Obama, Pope Francis, and Queen Elizabeth II.
And while the engagement argument was always suspect, time has proven it dead wrong. The oil companies have continued to lobby for climate action to be postponed, while exploring new oil fields, building new pipelines, and generally causing political and environmental damage. The divestment movement was one of the few impediments to that arson attack. Peabody Energy, the largest miner in the US, mentioned divestment as one of the reasons it had to seek bankruptcy protection, and Shell has listed it as a material risk to his future.
You can actually measure that impact very directly. The new study finds that if CalPERS had divested a decade ago, its portfolio would have produced 10.8% less carbon and CalSTRS about 17.6% less. That’s 32 million tons, or, according to the EPA’s greenhouse gas calculator, the annual carbon footprint of more than 3.5 million homes – almost the equivalent of a Los Angeles. Remember, if we don’t get climate change under control, the Golden State is on the agenda to lose 70% of its beaches this century – the pension funds literally guarantee that the state is not worth retiring.
It’s quite a trick to destroy the planet and lose billions of dollars in the process. But it’s not a trick worth repeating. California Senate Bill 252 requires CalPERS and CalSTRS to completely divest from the largest fossil fuel companies by 2031 and stop renewing or expanding existing investments starting next year. The bill is now under discussion in Sacramento. California’s retirees, taxpayers and youth deserve a break: The funds need to divest from fossil fuels.
Bill McKibben is a co-founder of the climate action group 350.org and Third Act, which mobilizes retirees for progressive causes, including divestment.
