Unions Ask State Pension Board to Consider Divesting from Fossil Fuels
Oil rig image via Shutterstock
The Massachusetts Nursing Association and the Massachusetts Union for Human Service Workers jointly delivered a letter Tuesday morning asking state pension administrators to determine the feasibility of divesting from fossil fuels. The two groups, which combined represent more than 40,000 members, many of whom are state employees, specifically requested that the Massachusetts Pension Reserves Investment Management Board determine “the pension fund’s exposure to the risks of owning fossil fuel assets” and provide details on how long-term risks associated with investments in fossil fuels have been evaluated.
According to the letter, the board has approximately $1 billion invested in fossil fuel assets.
The move comes as a growing number of studies indicate that fossil-free investment portfolios are outperforming portfolios with stakes in oil, gas, and coal companies. For instance, Matthew Patsky, partner and CEO at Trillium Asset Management, issued a report earlier this year that stated: “Harvard Management Company has lost an estimated $21 million dollars over the past three years by ignoring calls to divest and continuing to hold the world’s largest owners of coal, oil and gas reserves. The losses have accelerated recently with an estimated $14 million drop in just the past six months.”
Meanwhile, as noted by the Guardian, a study from financial firm MSCI “found that investors who divested from fossil fuel companies would have earned an average return of 13% a year since 2010, compared to the 11.8%-a-year return earned by conventional investors.”
In the letter delivered Tuesday, the unions noted that Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, has warned that “institutional investors who ignore climate risk face being increasingly seen as blatantly in breach of their fiduciary duty to their beneficial owners.” The letter also notes that World Bank President Jim Yong Kim has supported divestment and called on financial institutions to “rethink what fiduciary responsibility means.”
At the end of the letter, the groups present five questions that they would like answered by the Massachusetts Pension Reserves Investment Management Board, including whether it has considered partial divestment of its estimated $1 billion in fossil fuel holdings.
The Massachusetts Union for Human Service Workers, also know as SEIU Local 509, represents an array of professionals, from social workers to university lecturers, according to its website. The group has more than 19,000 members. The Massachusetts Nursing Association is the third largest union of registered nurses and health professionals in the country, representing 23,000 individuals.
