Comptroller, mayor kick off divestment process; city sues 5 major oil companies for climate change damages
The New York City Retirement Systems will take steps to divest from fossil-fuel companies, city Comptroller Scott Stringer and Mayor Bill de Blasio said Wednesday.
The pension system, which has five pension funds and five separate boards of trustees, has about $5 billion in fossil-fuel investments in more than 190 companies, according to a joint news release from the comptroller and mayor. New York City Retirement Systems has $189 billion in assets.
The pension system will "maintain is fiduciary responsibilities" in exiting fossil-fuel investments, Mr. Stringer, who is the pension system's fiduciary, said at a news conference. "A stronger economy rests on a greener planet."
The divesting process is complex, he added. "There are many moving parts."
On Thursday, the comptroller and mayor will submit formal requests to the five boards of trustees. Messrs. Stringer and de Blasio or their representatives are trustees on each of the five pension boards.
Daniel Zarrilli, Mr. de Blasio's senior director for climate policy and programs, said at the news conference that pension fund trustees representing teachers and public employees already have expressed a willingness to explore fossil-fuel divestment.
The Teachers' Retirement System and the Employees' Retirement System hold about two-third of the fossil-fuel-related assets, he said. As of Oct. 31, the teachers' pension fund had $69.55 billion in total assets and the employees fund had $63.3 billion.
Although the comptroller's bureau of asset management makes investment recommendations for the five pension plans within the city system, the respective boards of trustees must vote to divest fossil fuels.
The trustees must ask the bureau to conduct a study on divesting fossil-fuel assets and "advise the trustees as to the anticipated impact on the risk and return characteristics of the portfolio," the joint release said. "The trustees will also seek legal opinion as to whether carrying out the divestment would be consistent with trustees' fiduciary duties to beneficiaries."
If they get the legal approval, the trustees will instruct the bureau to divest the assets according to specified guidelines and timetables. "In the case of this divestment, transactions would likely be carried out in stages in order to reduce transaction and implementation costs," the news release said. Mr. Zarrilli said the divestiture process could take until 2022.
At the news conference, Mr. de Blasio also said the city has sued five publicly traded fossil-fuel companies in federal court, branding them "the central actors" in climate change and saying the city was asking for "billions of dollars" in damages.
The companies are BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell. "It's time for them to start paying for the damage they have done," he said.