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Pressure mounts for New York City pension funds to divest fossil fuels

Councillors release letter written to Comptroller Scott Stringer

Political pressure on New York’s public pension funds to divest from fossil fuels has mounted after New York City councillors called on the city’s Comptroller Scott Stringer to assess exiting coal, oil and gas stocks from the five New York state pension funds he oversees.

It comes as New York Mayor Bill de Blasio had earlier called on the city’s five funds – which have a combined $160bn (€143.4bn) in assets – to divest their $33m holdings in coal and look at divestment of other fossil fuels.

The move has been welcomed by Democratic New York City council members Helen Rosenthal and Costa Constantinides – who in response have published a letter they sent to Stringer last month on starting a discussion about the financial performance – and associated risks – of the fossil fuel investments in the funds.

The letter outlines the potential risks of fossil fuel investments, and focuses especially on coal investments, highlighting the current collapse in coal firms’ share prices. The Council is an equal partner with the Mayor in the governing the city.

The councillors say a “vigorous and data-driven discussion” around these questions is vital considering the growing share of the New York budget devoted to pension fund payments – an outlay rising from 2% in 2000 to over 12% in 2015.

The councillors ask Stringer to assess the performance of the city’s pension funds’ fossil fuel investments and find out whether the performance would have been affected if they were fossil fuel free.
They also ask whether investment strategies take into account the potential long-term devaluation of fossil fuelcompanies and if the fund could divest, take holdings in the renewable energy sector and increase returns.

Rosenthal said: “For over a year I have called on NYC’s five pension boards to develop a road map to phase-out divestment from coal, and I’m proud that today Mayor Bill de Blasio endorsed divestment from coal and a study of divestment from all fossil fuels. It is a powerful step forward for the financial security of our pension funds and environmental security of all New Yorkers.”

According to De Blasio’s office, his proposals will be presented to the five New York City pension boards over the coming months “to examine the specific impact and optimal reallocation of these assets”.

The pension funds include the New York City employees’ retirement system, the teachers’ retirement system of the city of New York, the New York City police pension fund, the New York City fire department pension fund, and the New York City board of education retirement system.

In a statement, Stringer said he was eager to discuss divestment ideas but stopped short of endorsing the mayor’s moves. “We welcome the Mayor’s contribution to the ongoing discussion, and look forward to working closely with his office to conduct a comprehensive study,” the comptroller said. “We also look forward to engaging with our trustees in a robust conversation about the best ways to achieve our shared goals of addressing environmental concerns, while at the same time building greater value for the City’s five pension funds.”

New York State Comptroller Thomas DiNapoli is also facing political pressure that would require the $176.8bn pension fund he oversees to divest all fossil fuels by 2020.