New York City’s largest municipal pension funds voted to fully divest from fossil fuels on Monday, according to a press release.
The decision will reallocate $4 billion away from fossil fuel companies and toward economic sectors that are more conducive to a healthy planet. Environmental advocates have long called on governments, institutions, and investors to divest from fossil fuel companies as a way to deprive the industry of resources and accelerate its demise.
New York’s announcement was applauded by the environmental community.
“New York City has set a new bar for climate finance action,” said Bill McKibben, author and co-founder of 350.org, in a statement. “Today’s landmark action marks a bad day for Big Oil and a good day for the city’s pension systems and our planet. By taking billions out of the companies that own and profit off of fossil fuels, New York City is playing an enormous role in moving the financial industry toward a greener future.”
Pension funds that cover New York city employees, including teachers, were part of the historic vote. The plan to divest from fossil fuels was announced in 2018, following pressure from local activists for the city to take climate action.
City leaders said at the time that they would divest pension funds from fossil fuels and also double investments in climate mitigation and adaptation within five years. Mayor Bill de Blasio said on Monday that the city was on track to reach this second goal by investing in renewable energy, green infrastructure, and other areas.
“Fossil fuels are not only bad for our planet and our frontline communities, they are a bad investment,” said de Blasio in a statement. “Our first-in-the-nation divestment is literally putting money where our mouth is when it comes to climate change. Divestment is a bold investment in our children and grandchildren, and our planet."
New York plans to work with C40, a network of nearly 100 cities around the world addressing climate change, and the city of London to encourage other cities to divest from fossil fuels. In 2020, the mayors of 12 major cities, led by New York City and London, pledged to divest from fossil fuels and put money and resources into green efforts.
Over the past several years, fossil fuel divestment has grown from a fringe issue to a multi-trillion dollar campaign, encompassing universities, multinational institutions, leading investment firms, and municipal groups.
Divestment is not an end in itself. Instead, environmental advocates want divestment to build momentum for stronger climate action including the phasing out of fossil fuels entirely and a commitment to environmental conservation.
New York is highly vulnerable to climate change. Already, the city is warming faster than other parts of the United States. As a low-lying coastal metropolis, the city is exposed to sea level rise and intensifying tropical storms. In 2012, Hurricane Sandy gave a preview of what New York may face as climate change intensifies: catastrophic flooding, community displacement, and widespread damage to buildings and subways.
The mayor’s office plans to slash the city’s greenhouse gas emissions by 80% by 2050 compared to 2005 levels, while also making infrastructure more climate resilient, and investing in communities most impacted by climate change. Divesting from fossil fuels is a key part of the plan.
“It is right and just that, in the midst of the deadly pandemic, our beloved NYC is choosing life over death and acting on its commitment to divest the pension funds from fossil fuel investments,” said Marilyn Vasta, for Peoples Climate Movement NY, in a press release. “For too long we have financially supported the polluters that harm us; it is time to make polluters pay as we invest in a just transition to renewable energy."