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Divesting from fossil fuels will pay off in long run, NYC comptroller says

Stringer: ‘Hit energy companies where they hurt'

May 9, 2019 Mary Frost
NYC Comptroller Scott Stringer is disinvesting the city’s pension funds from fossil fuels and is “doubling down” on investments in the green economy, he said at an exclusive interview with the Brooklyn Eagle on Wednesday. Eagle photo by Mary Frost

City Comptroller Scott Stringer’s plan to divest city pension funds from fossil fuel stocks has received flack in some investment circles. He made the case on Wednesday, however, that green investing is not just a feel-good idea, but a canny investment strategy that will pay off in the long run.

Stringer oversees almost $200 billion in assets for New York City’s five public pension funds for city employees including teachers, firefighters and police.

In an interview with the Brooklyn Eagle, Stringer said that he strongly disagrees with the notion that fossil fuel stocks and bonds are gold-plated investments.

“I think the future of our economy is in green investments, whether it’s solar or coastal resiliency,” he said. “There’s a market for green bonds and blue bonds, and so part of what I’m doing is doubling down, doubling our investments in the green economy, and we are now engaged in a fossil-fuel divestment plan.”

The city has issued a formal Request for Proposals, Stringer said. “We’ve gotten back proposals, we continue to work towards fossil fuel divestment.”

“We’re the first public pension fund in America to take this on,” Stringer said, though he noted that other countries worldwide have divested trillions in assets. “Extracting fossil fuels is not the future.”

Stringer said as a fiduciary of the fourth-largest public pension fund in the United States, his first priority is to protect the retirement security of cops, teachers and firefighters.

“We have to look at ways to make wise investments. Energy production companies, whether it’s Exxon or any other company, have the potential for ‘stranded assets’ and losing money in the long term,” he said.

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Not everyone is in agreement about divesting from fossil fuels. The city says that its goal is total divestment within five years. Two of the five funds, however, have rejected the idea because of worries that divestment will lead pension funds to underperform. Stringer and Mayor Bill de Blasio have seats on the pension fund boards, but do not have control of the boards.

Stringer’s comments to the Eagle echoed statements he made to enthusiastic applause on Tuesday at the Waterfront Alliance’s 2019 Waterfront Conference, held aboard the Hornblower Infinity charter yacht. The conference’s theme was “Rising Seas, Rising Risks.”

In a conversation with Marketplace’s Janet Babin, Stringer told the crowd that divesting was the only way to “hit energy companies where they hurt.”

As an older dad, Stringer said he thinks about how he can leave the world a better place for his 5- and 7-year-old sons — something he says energy companies won’t do “unless we push them” into it.

On Tuesday, Stringer sent a letter to Con Edison rebuffing their “threat” of a natural gas moratorium should the controversial $900 million Williams Pipeline project be rejected.

Con Ed had cautioned that if the Williams Pipeline is not approved, the company may have to declare a moratorium on new gas connections in the New York City service area.

Stringer called the statement a “threat,” adding that if the pipeline is not approved, “Both Con Edison and National Grid must be prepared to offer alternative plans to meet the energy needs of their customers and the city. New Yorkers rightly expect that their publicly regulated utilities work diligently to offer affordable, reliable, and clean energy.”

“This is not a time to double down on yesterday’s fossil fuel infrastructure, it is a time to build a cleaner, healthier tomorrow,” Stringer added.

Stringer has used the power of NYC’s pension funds in the past to achieve social goals. Through the Boardroom Accountability Project, the pension funds have provided incentives for electing more diverse directors on the boards of public companies.

According to Morgan Stanley, divestment in fossil fuels reached approximately $3.4 trillion globally in 2016.

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