While the cities of Cape Town and Durban talk, New York sets concrete fossil fuel divestment targets and plans
PRESS RELEASE – December 10, 2020
Johannesburg, South Africa – Yesterday the New York State Comptroller Tom DiNapoli announced that the $226 billion New York State Common Retirement Fund is moving to divest from the riskiest oil and gas companies by 2025 and decarbonize by 2040.
This follows New York City’s 2018 announcement of a five-year plan to divest its massive pension funds from fossil fuels.
In South Africa, two cities, Cape Town and Durban have both committed to divest from fossil fuels. However, neither have yet developed a clear plan or actually moved money as a result of their commitments. This despite repeated engagements in the case of Cape Town between the City and activists since the City originally announced their commitment in 2017. Durban has similarly not given any further details of their plans nor action as a result of their commitments, though we acknowledge this is a far more recent commitment than Cape Town’s.
New York’s announcement is one of the biggest leaps forward worldwide on climate finance action in 2020, an otherwise bleak year for the planet. It creates the most comprehensive program of any large public fund worldwide to divest from fossil fuels, decarbonize across a massive portfolio, and put major financial pressure on public companies – from auto companies to utilities – to align their operations with the scale of climate action needed to stave off worldwide catastrophe.
The victory comes eight years after New Yorkers launched the #DivestNY campaign, days ahead of the December 12 fifth anniversary of the Paris climate accord signing, and sets the bar for climate finance action ahead of COP26 next year in Scotland.
The state is taking a ground-breaking, systematic approach to reviewing and assessing each fossil fuel company subsector, with a process grounded in fiduciary responsibility. The results of the first review, targeting the coal subsector and completed earlier this year, resulted in divestment from 22 coal companies. Similar divestment action is anticipated from the current tar sands review, which is set to conclude next month. Reviews of fracking, oil majors, fossil fuel service companies, and oil and gas transportation and pipelines will follow. All reviews and divestment actions will be completed by 2025. It is these sorts of concrete actions and plans with deadlines that South African cities should implement to give any weight to their commitments.
Cape Town and Durban’s commitments to divest from fossil fuels are particularly vital for South Africa given the fact that the country’s current greenhouse gas emissions reductions commitments fall far short of the obligations it assumed when it ratified the 2015 Paris climate treaty; and are repeatedly undermined by massive continuing subsidies for the fossil fuel industry and support for the coal industry in particular. Public finance institutions such as the DBSA and IDC continue to fund fossil fuel investments and commitments made by President Ramaphosa’s government to fight climate change have not translated into sufficient action.
Quotes from South African spokespeople
“Since Cape Town made its divestment commitment in 2017, we have seen no concrete plans or actually moving of money out of fossil fuel-compromised investment instruments. It is about time that Durban and Cape Town take the New York City and State cue and walk the talk. The ticking time bomb that is the climate crisis needs urgent action.” – Glen Tyler-Davies, SA Team Leader of 350Africa.org
“Fossil fuel companies that do not have step-by-step science-based plans for transition to net zero emissions well before 2050 are now systematic human rights abusers, climate criminals; and no-one should be investing in them. Cape Town and Durban are on the right path but they need to take urgent action. They should work together to put more pressure on asset managers and get better deals for ratepayers. The first step is to be transparent about their current fossil fuel assets. Then they should invite asset managers to propose new socially responsible and fossil fuel free investment options, while inviting other SA cities to participate.” – David Le Page, coordinator: Fossil Free SA.
Quotes from international spokespeople (on the NY announcement)
“This victory–after years of campaigning by so many people–is a great victory for the climate, because it both demonstrates the waning power of the fossil fuel industry and because it accelerates that decline. It is a morally bankrupt industry, and increasingly a financially bankrupt one as well,” – Bill McKibben, co-founder 350.org.
“Today’s announcement from the Comptroller is an exciting, bold, and responsible leadership position, one that sets a high bar in a vital year for climate action. The New York State Common Retirement Fund is the third largest pension fund in the country, and when it takes action, people pay attention. Rigorous and timely review, with divestment for climate laggards across the energy sector, and a commitment to a net zero portfolio by 2040 will protect the fund, current and future retirees, and taxpayers from unacceptable levels of climate risk. It also sends a clear message that the era of dirty fossil fuels must and will come to an end, and the smart money is getting out sooner rather than later. I thank my many colleagues in the Senate and Assembly who joined me in educating the public and investors about the importance of divestment from fossil fuels, and also the Divest NY advocates for their years of tireless work to achieve this result. This announcement is a big deal, and it is a win-win for the State Pension Fund’s bottom line, and the future survival of our society.” – NYS Senator Liz Krueger
“Comptroller DiNapoli is launching the best program of any major public fund worldwide to combat climate change and safeguard retirees’ long term interests. The Comptroller’s listened to experts, activists and state legislators and, today, history is being made.” – Patrick Houston, Climate & Inequality Campaigns Associate, New York Communities for Change.
“This is an important step in the worldwide campaign to stop investments in fossil fuels in order to prevent the worst of global warming. This is also a win for the effort to protect taxpayers and retirees from the escalating loss in value of companies engaged with fossil fuels. New York must continue to be a leader in the effort to save future generations from the worst impacts of climate change.” – Mark Dunlea, Chair, Green Education and Legal Fund and a member of 350 NYC and Albany (PAUSE)
“New York State is sending a global signal that economic recovery goes hand in hand with transformative climate action. This is a victory for all of us fighting for a safe climate, quality jobs, and an equitable society that holds fossil fuel companies accountable. Comptroller Tom DiNapoli, Senator Liz Krueger, and Assembly member Felix Ortiz should be proud to celebrate their climate leadership alongside New Yorkers. History will show December 2020 as a turn in the tides shifting finance away from coal, oil, and gas of the past, toward our communities and a just recovery. If the $226 billion New York State pension Fund can do it, then every bank, pension fund, sovereign fund, and insurer can do it too. We call on the world’s investment funds to take action like New York’s bold and comprehensive model. Now.” – May Boeve, 350.org Executive Director
For years, so many faith based organizations have been on record in supporting divestment of large government and not for profit funds including their own funds of fossil fuel holdings. So many have felt the call to take care of this planet that God has created and ensure that it is in good shape for future generations. Today, it is thrilling to us that Comptroller DiNapoli has decided to take the boldest possible steps to methodically divest the New York State Pension Fund of fossil fuel stocks in order to safeguard our planet and future generations. I am also grateful for all the members of the assembly and state senators who made today possible and I especially want to recognize so many people of faith across this state and nation for their courage, persistence and advocacy to bring us to this great day. – Rev. Peter Cook, Executive Director, NYS Council of Churches
“New York is once again stepping into a leadership role on climate action. I applaud Comptroller DiNapoli’s plan to eliminate investments in fossil fuels from the Common Retirement Fund. This decision sends the message that fossil fuels are no longer a sound financial investment and will contribute to the shift towards an economy powered by renewable energy. The Divest NY coalition is to be commended for their tireless efforts to move NY forward.” – Sue Hughes-Smith, Climate Solutions Accelerator of the Genesee-Finger Lakes Region
“News of the fossil fuel divestment of New York State’s massive pension fund is a breath of fresh air! The time is right to stop financially supporting industries that pollute the environment, compromise human health and destabilize our climate. Hopefully, a plethora of funds and institutions will follow suit as divestment is an important tool as we work to mitigate an increasingly disrupted climate.” – Sally Courtright, The Climate Reality Project: Capital Region, NY Chapter
“This decision represents a powerful act of compassion and justice. There is no morally acceptable future in which investors seek profit from the destruction of life itself. Today, New York State stands on the side of the angels.” – Rev. Ken Scott, Capital Region Organizer, GreenFaith
“This is yet more proof that we, the people, can make lasting change when we decide to come together to demand that we divest from industries that threaten the health and well-being of our planet. Divestment from fossil fuels is a good start and inspiration for other state, city and local governments to follow. Our forests are burning, our lungs are polluted, there are jobs lost and lives disturbed due to prioritizing profits for the few over the wellbeing of the many! We must divest now!” – Yousef Zakaria, Coordinator, CODEPINK
As the economic risks from climate change have mounted, it makes clearer the need for bolder action by government, business and investors. We can build an economy by redirecting our assets out of fossil fuels and into investments in all sectors that enable a more equitable and sustainable economy, said David Levine, President, American Sustainable Business Council. On behalf of the over 250,000 businesses and investors we represent, we applaud the NY State Comptroller in setting the bar high with a comprehensive climate action plan as an example for the rest of the country to follow.
“For faith communities around the world, the climate emergency and fossil fuel divestment are profound moral issues. Comptroller DiNapoli’s commitment to divest from fossil fuel companies that fail to have real transition plans to get out of fossil fuel production is a genuine act of moral leadership. His climate action plan sends a message to corporations that it is unacceptable to profit from activities that threaten the future of our society and the planet.” – Sister Eileen O’Connor, RSM & Roger Cook, Co-Conveners, Interfaith Climate Justice Community of WNY