Dorian Fulvio was nearing retirement after nearly 20 years in the New York City comptroller’s office when she started thinking seriously about her pension. Though she appreciated the security it promised, its fossil fuel investments bothered her: Fulvio didn’t want to profit from an industry that contributes so heavily to climate change. “I started to panic about this,” she says.
So after retiring in 2016, the former IT professional joined her local chapter of 350.org. The organization, founded eight years before by environmentalist Bill McKibben, was at the time on the vanguard of a growing divestment campaign aimed at Big Oil. Energized, Fulvio joined its effort to pressure the city into banishing that polluting business from its investment portfolios. (Editor’s note: McKibben is a member of the Grist board.)
This hard work paid off in January, when city Comptroller Scott Stringer’s office announced that it had begun removing $4 billion in fossil fuel assets from three pension funds. New York is the first major city in the United States to make such a move, which is expected to take two years to complete. It plans to instead double, to more than $6 billion, its investment in “climate change solutions.”
Cleaning up the Employees’ Retirement System, Teachers’ Retirement System, and Board of Education Retirement System honors a commitment the city made in 2018, one that led the state to make a similar pledge with its $226 billion New York State Common Retirement Fund in December.
The divestment movement has continued to gain momentum in the months since New York City’s decision. New Jersey is weighing a bill requiring the elimination of fossil fuel investments from its state pension fund, and California faces growing pressure to do the same. The University of Southern California, the University of Pittsburgh, and Rutgers University have outlined plans to divest, and Harvard is among those being urged to do so. Others will have little choice in the matter if the Teachers Insurance and Annuity Association of America, which provides pensions for many institutions, heeds calls to divest.
All of this comes as the fossil fuel sector reels from an abysmal year. More than 100 companies filed for bankruptcy in 2020, and the industry saw debt surge past $100 billion during what was “arguably the most devastating year in its history,” according to an analysis by the consulting firm Rystad Energy. Compounding the fossil fuel industry’s woes, state and federal regulators have indicated a commitment to expanding renewable energy and addressing climate change.
The divestment movement has jumped from the margins to the mainstream in relatively short order since getting its start in 2008. It drew inspiration from a similar effort to end apartheid in the 1980s and was championed largely by college students, until McKibben raised the issue during a 21-city speaking tour in 2012. That prompted activists at 100 universities to take up the cause. Nearly a decade later, 195 educational institutions are among the 1,312 entities — including faith-based organizations, corporations, nonprofits, and pension funds — that have committed to divesting at least partially.
Lyna Hinkel has been involved in the effort since founding 350 NYC in 2012, shortly after Superstorm Sandy walloped the East Coast and wreaked $19 billion in damage to the city. The threats of climate change felt palpable, she says, which made the organization’s message salient — even if the odds of success looked long.
“It honestly seemed a bit like Mission Impossible,” Hinkel says. “Divestment is not the sexiest campaign. It’s a little bit heady. People thought that it would never happen. I kind of thought I was crazy, too.”
Much of her earliest work focused on mastering the financial concepts behind the idea and meeting with elected officials and pension fund trustees to sell them on it. She gained a key ally in 2015 when Letitia James, who was the New York City public advocate at the time and is now the state attorney general, voiced her support. Three years later, Governor Andrew Cuomo included a non-binding divestment plan in his state of the state address.
The moral argument for shunning those investments was never hard to make, though. The challenge was convincing people that divesting made financial sense. The movement got a handy assist with that in 2018 when Corporate Knights, a magazine focused on sustainable business, reported that the New York State Common Retirement Fund would have earned an additional $22.2 billion had it ditched fossil fuel stocks, which were growing increasingly risky as the energy economy embraced renewables, in 2008. The idea is hardly foreign: 985 institutional investors holding $6.24 trillion in assets had already liquidated such stocks by the time the magazine published its findings.
“Fossil fuels are not only bad for the planet, they’re a lousy investment,” says Sandy Emerson, an organizer with Fossil Free California. The organization is pushing the California Public Employees’ Retirement System, the nation’s largest public pension, to eliminate fossil fuels from its $440 billion fund. Despite mounting evidence that its 2 million or so members would be better off with investments that aren’t so volatile, CalPERS has so far refused.
“Consciousness of divestment doesn’t percolate rapidly, and it certainly doesn’t percolate up to pension boards,” Emerson says. “They’re timid, they’re conservative, they’re embedded, they’re intransigent.”
The lackluster investment performance and societal harm of fossil fuels is a key argument in Divest Harvard’s latest case for divesting. Last month, the organization asked the state attorney general to investigate whether the university is violating the Uniform Prudent Management of Institutional Funds Act by continuing to hold $838 million in fossil fuel investments. The law requires nonprofit organizations to make investments that are fiscally wise and in line with their social mission.
The time has long since passed when the university could claim any kind of leadership role on the issue, says Divest Harvard organizer Ilana Cohen. But such a commitment would nonetheless signal a key shift among Ivy Leagues, which historically have strong ties to Big Oil, she says. “Harvard is a $42 billion institution with a global reputation,” she says. “If Harvard takes a stand against this industry, it really means something.”
And so the fight continues both for organizers like Cohen and pensioners like Fulvio, who, alongside the DivestNY coalition, has shifted her attention to the New York State Teachers Retirement System. Given the momentum she’s seen unleashed by Stringer’s announcement just a few short months ago, she’s confident the movement will score more victories in the months ahead. “We’re not done yet,” she says.