Right Wing Group Makes Specious and Unfounded Claims about NY Pension Funds on Climate Change

Shame on The Hill for allowing Logan Albright to write a sloppy and slanted attack on the New York pension funds and the elected fiduciaries who are responsible for them without revealing the biases of the right-wing, corporate-funded organizations he represents.

Albright is so certain that there could not possibly be any financial case made for adjusting investment parameters to reflect climate change risk that he does not feel the need to support his concerns with any data or research, resorting only to sneering insults. Words like “clumsy” and “Upper East Side cocktail party crowd” cannot hide the complete lack of any factual basis for his charges.

While this may be a popular move with the Upper East Side cocktail party crowd, it’s hard to see how it will help the workers who rely on those pensions for their basic needs. A retired policeman or firefighter is more concerned with being able to afford groceries than with global carbon emissions. In a clumsy attempt to justify the divestment, New York City Comptroller Scott Stringer pontificated, “Safeguarding the retirement of our city’s police officers, teachers and firefighters is our top priority, and we believe that their financial future is linked to the sustainability of the planet.”

Stringer’s comment is exactly what one would hope for. Unlike Albright, he has looked at the facts and the numbers and determined that the decision to reduce risk to fossil fuel is the best way to protect the retirement security of the pension plan participants.

Albright makes two unacknowledged and unsubstantiated assertions: first, that there is no financial basis for making this decision, and second that the city employees who are the pension plan participants are incapable of understanding the connection between climate risk and investment risk.  It is striking that this piece appears on the same day that the Washington Post’s front page had a story about the Pentagon’s assessment of climate change risk in its own operations.  Clearly, any fiduciary must be assessing portfolio risk as well.

Stringer is subject to the two strictest systems of accountability in our system: he is accountable as a fiduciary to be scrupulous in protecting the interests of the pension plan participants and he is accountable through the political process to the citizens and taxpayers of the city.  In these capacities and upholding these standards, if he determines that the market is not currently evaluating the risks of investing in fossil fuel companies, which even Albright acknowledges is as likely as not, that is not politics; that is the market, and that is what capitalism is all about.

Source: New York City is putting politics ahead of pensions for workers | TheHill

2 Comments Add yours

  1. Mimi Hoffman says:

    Having been in Albany on January 23rd with DivestNY, the piece from The Hill seems so out of touch. The NYS Pension Fund legislation specifically has a bail-out clause if the divestment process (which is planned to take 5 years) is causing the fund to loose a lot of money. I am sure the NYC fund has a similar clause. On the state level, research shows the NYS fund, with its 5 billion, at least, in fossil fuel holdings lost the fund billions of dollars were the fossil fuel holding sold and re-invested in the balance of the existing portfolio. My experience talking with NYS legislators was they fully understood the impact of climate on municipal and state wide expenses (i.e. Hurricane Sandy) and were glad to learn the economic reality of investments in fossil fuel. I just posted on my blog about our Advocacy Day in Albany. Take a Look. https://shadesofgreen.blog/

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  2. aalasti says:

    The Hill also posted a disparaging piece by a representative of the Independent Petroleum Association of America. I responded (as did many others) with the comment below.

    http://thehill.com/opinion/energy-environment/371451-the-hypocrisy-of-fossil-fuel-divestment

    Immediately upon seeing the title, it was obvious that this is another propaganda piece from the Independent Petroleum Association of America, which has dedicated huge amounts of money to such efforts. There are misrepresentations of fact all the way through.

    New York University’s divestment campaigners are still very active, but the institution’s endowment has already sold its direct fossil-fuel holdings (as was done at Harvard, where also no formal divestment declaration was made), so the group has transitioned its focus to other climate activism. Meanwhile, the university has hired a new Assistant Vice President for Sustainability, and it is proceeding with a Climate Action Plan.

    Many other college and university campaigns continue, while others have joined the national Sunrise movement, which will be active in elections and in getting necessary legislation passed.

    Of course not mentioned by Eshelman are the *many* institutions worldwide which have already divested, and the successful financial track records which already exist. Syracuse University, for example, fully divested, and has had *no* losses as a consequence. The Rockefeller Brothers Fund similarly has almost fully completed its divestment, with good results. BlackRock, the largest private investment company, set up a fossil-free index fund with Pitzer College last year.

    As regards “Environmental, Social and Governance” considerations, Goldman Sachs is fully on board with advocating for the merits of including those factors in investment decisions, as are the many other large and small investment funds which are signatories to the Principles for Responsible Investment. Numbers of studies show that companies which attend to such concerns in general do better financially. BlackRock recently let it be known that companies in which it invests should be working to make the world a better place, and that company is certainly prioritizing profits.

    The critique from the American Council on Capital Formation which is mentioned by Eshelman comes from an organization which has received substantial funding from Exxon and the Koch brothers’ foundations, and which is an advocate for expansion of fossil-fuel exports.

    The New York divestment decision was made with a full consideration of fiduciary responsibility, after much deliberation by Comptroller Scott Stringer. Other public pension funds such as Washington, D.C.’s similarly did extensive investigation before committing to divestment.

    What is accomplished is risk reduction, and potentially an improvement of financial returns; also, disconnection from income produced by companies which insist on proceeding full-bore with practices that the entire world community of nations (except for one at this point) agrees is leading humanity into irreversible catastrophe. The campaigns leading to these decisions and the resulting announcements provide opportunities for public debate and enlightenment that no other process can duplicate.

    In a recent statement at the Investor Summit on Climate Risk, UN Deputy Secretary General Amina Mohammed said: “Divesting from carbon intensive assets” should become a “truly global phenomenon.” An increasing number of informed analysts agree.

    Unfortunately, the study commissioned by the Suffolk County Association of Municipal Employees uses the Independent Petroleum Association of America’s reports as references, although each of those relies upon easily debunked criteria (such as going back through 50 years’ worth of returns on stockholdings) to arrive at the same foregone conclusion. The false assumption was used that divesting funds would alternatively put the money into treasury bills. Global Analytic Services has cautioned readers that they are “not responsible for any errors or omissions” – an essential proviso for them. Note the bias indicated by the assertion that: “To divest immediately would be akin to telling the world not to breath air.” Not at all – it’s telling the world that practices of these companies, which have enormous power to influence the course of human events, is utterly unacceptable, and that attempts to enable the necessary transformative changes in practice have been and will continue to be futile.

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