Cuomo Calls for More Fossil Fuel Divestment
In a move that went nearly unnoticed during his 2019 budget presentation, Governor Andrew Cuomo called on his state agencies, including the MTA, New York Power Authority and the New York State Throughway Authority (in total—nearly $40 billion in value) to divest from fossil fuel companies. At a time when leading world experts warn the worst climate impacts will arrive much sooner than expected without swift, bold action—we must all be in this fight together—businesses, governments and institutions too.
This isn’t the first time the Governor has urged public and private enterprises to step up—at a pro-divestment panel at the Rockefeller Institute last April, he called for the New York State Common Retirement Fund to move toward full divestment and linked divestment in fossil fuels to expanding pension portfolios and state resources generally in investing in renewable technologies. He also previously supported a divestment strategy for the state’s overall pension funds but Comptroller Tom DiNapoli has consistently opposed such a move.
In this new call for action, Cuomo joins New York City officials whom, a year ago, proposed to divest their $200 billion pension funds of $5 billion in fossil fuels assets. That effort was hailed as among the most significant divestment attempts anywhere, as Mayor Bill de Blasio joined with London Mayor Sadiq Khan to lobby big city mayors around the world to follow suit.
Last month, New York City Comptroller, Scott Stringer, issued a Request for Proposals (RFP) seeking financial advisors to assist the City in moving those plans forward. The RFP defines divestment as withdrawing from current investments as well as excluding new investments. Stringer continues to forcefully tout the City’s action as a national model.
In the New York State legislature, Sen. Liz Krueger and Assemblymember Felix Ortiz have introduced a bill that instructs Comptroller DiNapoli to divest the massive New York pensions funds from the largest 200 fossil fuel companies. There is a safety valve—namely, the Comptroller can reinvest if there is “clear and convincing” evidence the fund has lost or would lose half a percent. The bill has numerous co-sponsors and a broad coalition of supporters have sprung up in the face of the Comptroller’s very public opposition.
Make no mistake—this is a growing global strategy with nearly $8 trillion committed for divestment in portfolios and endowments worldwide by over 1,000 institutions. The list of organizations that have committed to cut the financial cord to the oil, gas and coal industries is broad and widening—from faith-based groups like the World Council of Churches, four dozen Catholic institutions, Unitarians and the Lutheran Churches, to the Rockefeller family charities and the Nobel foundation, to Norwegian sovereign wealth fund and Lloyd’s of London. The insurance industry has shown a strong desire to cut loose from fossil fuels—giants like Axa and Allianz have moved aggressively to divest, an industry that now represents a commitment to divest nearly $3 trillion of the global total committed.
The push for fossil fuel divestment parallels a similar campaign against the tobacco industry in the 90’s (one which the New York State Comptroller’s office eventually divested from in part—I lobbied on that issue a quarter of a century ago as head of the NYC Department of Consumer Affairs). While that effort didn’t end smoking, it helped delegitimize an industry that poses a devastating public health threat and opened up a broad political space for local governments to create stronger regulations and inform the public of the harmful effects of smoking.
The fossil fuel business model, hellbent on maximizing its carbon assets’ value, is incompatible with a global push to set strict carbon limits and advance climate solutions that rise to the scale of the challenge. Of course, divestment alone won’t win the fight against climate change, which requires a sweeping scaling-up of clean energy and stronger protections for our precious natural resources. But divestment shines a light on the need to reject fiscal ties with powerful polluters.
We need more of our leaders to take bold action and ensure our energy policies represent the interests of our children and grandchildren—that means doing without dirty fossil fuels and charting a better, safer, healthier way forward together.