[NOTE: After the publication of this article, Mayor Bill de Blasio, Governor Andrew Cuomo and New York City Comptroller Scott Stringer called for divestment of public pension funds from fossil fuel companies and reinvestment in renewable energy. In addition, the Mayor announced a suit by NYC against five fossil fuel companies, seeking billions of dollars in damages to offset the impact of climate change on the city. These initiatives come after five years of organizing by environmental, community, faith-based and labor groups, all calling for New York to divest from fossil fuels.]
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American workers often feel overwhelmed by the power of capitalism in general and financial corporations in particular. We may feel we have few economic resources with which to exert our opinions and defend our needs in a system based on money – capital. We may want to challenge a fossil fuel economy that threatens the future for our grandchildren, but how?
Most American workers do own capital in the form of their own homes and, especially, in their pension funds. What if union members were to look closely at our pension funds and see how we could use them to create the kind of world we want: investments in renewable energy, public education, public transportation, affordable housing?
SIGNIFICANT INVESTOR
Pension funds are the single largest institutional investor, followed by banks, investment firms and insurance companies. Approximately $40 trillion were invested by pension funds in financial markets in 2015, giving workers much more financial punch than we realize or use.
Pensions represent deferred compensation to workers and are negotiated through contracts on behalf of union members, providing income during retirement years. Workers can exert financial power by protecting their pension fund investments and by investing that capital to create the world they want to see, the world they want to leave to their children and future generations. Too often the second part of this formula – having an impact on the world they want to see – is totally ignored. The value of fossil fuel stocks is declining as the world realizes the harm these pollutants inflict and as renewables advance. In short, fossil fuel stocks are a bad investment on every level.
A growing number of American workers are questioning the wisdom of keeping their hard-earned deferred income in fossil fuels. Some unions are joining other financial entities (e.g., universities, faith organizations, foundations) which have divested their funds from fossil fuel holdings. Pension funds committed to divestment comprise 12 percent of all divestment commitments; $5.2 trillion in assets are presently pledged to divest from fossil fuels. That’s a huge start in starving the fossil fuel industry of valued capital and making them a pariah economic sector.
CURTAIL CLIMATE CHANGE
After President Donald Trump pulled the United States out of the Paris climate accord, the three hurricanes in the Caribbean and Gulf Coast and the wildfires in Northern California, union members have a new desire to do what workers can to slow the process of climate change and move toward a renewable energy economy, one based on equity, not just profit.
In New York City, the organizing work of 350.org, Divest New York and New York Communities for Change, and several unions – including ours – has borne fruit. Divesting city and state public pension funds from fossil fuels was one of the short list of demands of the “Sandy 5” march, commemorating the fifth anniversary of Hurricane Sandy. It was supported by 150 organizations including over a dozen unions. Public Advocate Letitia James followed up with a hearing on climate change and divestment held at Borough of Manhattan Community College.
Each New York City public-sector union pension fund functions a bit differently. PSC members have pension funds in either TIAA, a defined contribution plan where investments are privately determined, or Teachers Retirement System (TRS), a fixed-benefit NYC pension fund, where trustees make investment decisions. Along with the city comptroller, only the United Federation of Teachers (UFT) is represented on the TRS board, not the PSC. City public-worker funds, including TRS, are tightly regulated to protect the funds. The city’s pension funds have already divested from coal, private prisons and guns but those holdings were quite small, especially in comparison with the almost $4 billion holdings of fossil fuel stocks. Fossil fuel divestment will have to be rolled out over a few years to insure fund stability. After receiving studies tracking the carbon footprint of stock holdings and the feasibility of divestment, climate-change activists expect the pension fund trustees to vote on divestment soon.
EXPANDING INFLUENCE
The Divest New York coalition, now joined by rank-and-filers and leaders in the PSC, District Council 37, UFT and Transport Workers Union Local 100, has expanded our reach through a petition drive, extensive lobbying and leafleting, demonstrations outside of pension board meetings and presentations at union meetings. But the most profound shift in worker response to climate change has been the evidence before us that climate change is happening. Workers cannot deny this and workers should not deny our power as workers to use what workers can – our minds, our muscle, our influence and our capital in the form of our pensions – to lead the way to a just and sustainable future for Planet Earth.
Nancy Romer is professor emerita of psychology at Brooklyn College and a former member of the PSC executive council. She is a member of the PSC environmental justice committee.
