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  Public Employee Press

PEP Nov 2016
Table of Contents
  La Voz

Public Employee Press

Union panel explores fossil fuels divestment


PEP photos by Gregory N. Heires  

Jeremy Sanders
Zoological and Museum Employees
Local 1501 President

Environmentalists question whether public pensions should invest in the fossil fuel industry.

Part of their argument is political.

As supporters of alternative energy, the activists view divesture as a means to weaken oil and coal companies-and they believe public funds shouldn't be invested in companies that harm the environment.

They also argue that fossil fuel companies are a poor investment because alternate energy companies will soon crowd out the traditional companies.

But for pension plans, the divestment is a tricky issue. Trustees have to determine whether the divestment process will be too costly and whether abandoning fossil fuel companies is financially prudent.

On Oct. 14, DC 37 held a forum, "Climate Justice & Pension Fund Investments: Divesting Public Pension Funds from Fossil Fuels," organized by the union's climate justice committee. Committee chair Jeremy Sanders, who is the president of New York Zoological and Museum Employees Local 1501, served as the moderator.

"We would have to be very cautious about doing this pullout," said DC 37 Executive Director Henry Garrido, who is a trustee of the New York City Employee Retirement System. The $58 billion fund has commissioned a study to examine divestiture.

Ray Santander, an assistant director in the DC 37 Research and Negotiations Dept., represents Garrido on the NYCERS board. He discussed the challenges of divestment and investment alternatives.

Ray Santander
Assistant Director DC 37
Research and Negotiations Dept.

A key issue is whether the new companies would meet NYCERS's goal of 7 percent return on investments. The fund's performance in fiscal year 2016 was 1.76 percent. Over the past three years, it was 7.8 percent.

By transitioning away from carbon-based investments, the fund could explore investing in clean energy companies that produce solar, wind, geothermal and renewable energy, Santander said.

The new investments could help the country meet the estimated $3.6 trillion in infrastructure spending needed by 2020, Santander said. The infrastructure investments could be used for improvements to water systems, mass transit, schools, hospitals, power generation systems and ports, roads and bridges.

Robert Muehlenkampf, of the Labor Network for Sustainability, addressed the opposition of trade unions to "green" spending that threatens jobs. He said unions stand to gain many as ½ million new members by supporting alternative energy companies.

Tom Sanzillo, finance director of the Institute for Energy Economics & Financial Analysis, argued that divestiture would be a financially prudent step. The fossil fuel industry, whose presence in the economy has been on the decline for decades, faces a dim future, according to Sanzillo.

Jon Forster, a member of the DC 37 Climate Justice Committee and a former first vice president of Local 375, said unions need to work closely with the city on green projects, which have generally been contracted out.

Judy Sheridan Gonzalez, president of the New York State Nurses Union and a nurse, discussed climate change's effect on public health.

State Sen. Liz Krueger and City Council member Helen Rosenthal made the case for fossil fuel divestment while acknowledging the difficulty of making it a priority in the state local legislative bodies.

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