Fossil Fuel Divestment: The Dominoes are Starting to Fall

#AWESOME. Would love to hear details of implementation -- how the communities substitute for the fossil part of the portfolio. - promoted by charley-on-the-mta

The dominoes are starting to fall on fossil fuel divestment in Massachusetts. Last week, the Framingham Town Meeting approved a resolution urging town managers to divest town funds from fossil fuels. Concord and Sudbury voted in favor of similar resolutions earlier this month. Eight towns in Massachusetts have now voted in favor of divestment, more than in any other state.

Each of these victories is a milestone in its own way.  Framingham is one of the largest and most diverse towns to divest, while the vote in Concord carries symbolic weight: no doubt Emerson and Thoreau would be cheered to see their hometown leading the nation once again.

The victories don’t stop there. The Unitarian Society of Northampton and Florence and the First Religious Society of Newburyport both voted to divest earlier this week. Faith communities all over Massachusetts have already divested, including the United Church of Christ, the Episcopal Diocese of Massachusetts and various Unitarian churches.

Over the past two years, fossil fuel divestment has grown from a struggling effort on a handful of liberal college campuses into something that’s practically mainstream. There are hundreds of divestment campaigns all over the country. Dozens of colleges, cities and religious institutions have sold their oil, coal, and gas stocks. Divestment is now discussed regularly in the national media. Even Obama is on board.

Here in Massachusetts, the fossil fuel divestment victories come at a critical time. The state legislature is currently considering Senate Bill 1225, which would make Massachusetts the first state in the nation to divest its pension fund from fossil fuels. The Joint Public Service Committee faces a June 30th deadline for moving the bill out of committee, but legislators will need to act sooner than that for the bill to pass during this legislative session.

Better Future Project / 350 Massachusetts has been leading the divestment effort in Massachusetts, and we’re finding that the excitement just keeps growing.  Hundreds of activists all over the state are pushing to pass S. 1225 and leading divestment efforts in their communities. As the planet warms, we’re going to keep turning up the heat.

The writer is the Communications Coordinator for Better Future Project / 350 Massachusetts.


10 Comments . Leave a comment below.
  1. The United Church of Christ...

    …is being a leader on this nationwide as well. Rev. Dr. Jim Antal, the Minister-President of the Massachusetts Conference of the UCC, led a successful effort to get the UCC General Synod to support divestment and get the national church to itself divest.

  2. There was a great article on divestment

    on MassLive.

  3. Mutual funds!

    I’m a member and past board member of the Unitarian Society of Northampton and Florence, and familiar with the debate that led to our 83-3 vote at the recent annual meeting.

    Our endowment is in mutual funds, where we hold a share of a vast portfolio, so it is difficult to say what percentage of it is in the 200 listed fossil fuel companies from which we intend to divest. (Pretty definitely less than 5%.) The ideal situation would be if the large mutual fund managers offered a fund that was free of holdings in those companies. This post documents some of the growing potential demand for such a fund from small institutional investors. I’d be surprised if Vanguard or somebody doesn’t respond to that demand soon.

  4. I have serious reservations

    I like the fact that we are having this conversation. It is clearly imperative that we end the use of non-renewable fuels.

    To do so at the expense of stakeholders (in this case current and future pensioners), however, is in my view wrong. Perhaps even unethical.

    Let’s use our shares of the fossil fuel companies to voice our concerns to them and in public ways.

    The Bay State has made tremendous strides in encouraging renewables, under the guidance of a very environmentally-conscious Governor. Let’s do more of that. Pick up the pace. Convert state-owned vehicles. Install solar panels on the roofs of every school and state university. There is a lot more we can do that will not hurt the beneficiaries of our pension system.

    • You have to show

      that divesting will harm beneficiaries. Might be true, might not. A quasi-testable proposition, at least.

      In any event I don’t see any conflict between doing both divesting and investing in the kind of full energy make-over that we need to accomplish.

    • A fwe pokebacks

      1. For public pension funds, a lower rate of return doesn’t cost the pensioners, it costs the current taxpayers — society at large. That society at large is the same society suffering the results of climate change.

      2. You assume that the returns for fossil fuel stocks are higher. If that were generally true, then we’d expect investors to purchase more fossil fuel stocks in the chase of higher returns. Naturally, this would increase the price of fossil fuel stocks until equilibrium was reached. All of which is to say there is no economic reason why fossil fuel stocks would pay out a higher rate of return in the long run, commensurate with their risk.

      3. Pension funds don’t own a lot of a particular grouping of stocks. Let’s say of all the financial investments — stocks, bonds, real estate, etc — a pension fund holds 2% of its total wealth in fossil fuel stocks. And lets say that they forego 1% return on investment by choosing something else (in violation of item (2) above). The return has gone down by a whopping 0.02%. That’s in the noise. That’s not noticeable.

      We could and should do all those other things too, but you’ve provided no evidence that divestment would cause any harm to the beneficiaries of our pension system.

      • Well, not exactly.

        I think the problem here is this:

        1. When Social Security was enacted, Massachusetts opted out in favor of setting up its own retirement system for state employees. This enabled the state to defer its own contributions to this system till they were absolutely needed.

        2. And in fact with a few exceptional years, the state has consistently underfunded or not funded at all the state pension system. As a result, the money in this system is overwhelmingly money that came from the state employees themselves.

        3. Now this wasn’t enough to fund the retirements of state employees, when they started happening. So gradually over the years, the mandatory contribution of state employees to these funds has increased, to the point where newly hired state employees can now expect to contribute more to the fund than they will expect to get back on retirement (allowing, I suppose for expected investment returns).

        4. And finally, when even this seemed not to handle everything perfectly, the Patrick administration and the legislature has started cutting back on the benefits that state employees can expect to receive.

        So it seems to me that in fact it’s *not* the “current taxpayers”, or “society at large” that stands to lose if the pension fund loses value. The state has exhibited a total lack of interest in fully funding it.

        It’s really a sad story, and an indication of how poorly the effors of public employees are regarded.

        • Fair point

          You raise a great point regarding who has, over time, funded the pension (both the taxpayers and the employees, with that increasingly skewing toward employees).

          The conclusion swings too far though. Both employees, current pensioners, and taxpayers will lose if the pension fund loses value.

  5. And, of course...

    And everyone in Massachusetts – everyone on the planet – will lose if we allow climate change to continue unchecked.
    Retired state employees are actually the ones leading the state divestment movement in Massachusetts. These retirees rely on their pensions, and they’re pushing for divestment in part because it makes economic sense. The value of fossil fuel companies is dependent on reserves of oil, coal, and natural gas – reserves that must remain in the ground for us to have any hope of avoiding dangerous climate change.
    We should divest now, before our pension fund – and our shoreline – is underwater.

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