Two House lawmakers from Burlington, Rep. Chris Pearson and Rep. Kesha Ram, will introduce legislation later this week that would require the state to stop investing in the fossil fuel industry over a number of years.
Pearson, a Progressive, told VTDigger that the bill instructs a board which handles the state’s retirement savings investments, to devise a plan to divest from fossil fuel companies over three years. The bill requires the board to draft the plan within a year.
“We spend a lot of money as a state combating the impacts of climate change,” said Pearson, who pointed to Tropical Storm Irene and record-high Lake Champlain levels in 2011 as examples of climate-related destruction.
“It doesn’t make a lot of sense to put a lot of pressure on our budget from climate change, at the same time as we’re investing in the businesses that are perpetuating climate change,” he said.
The bill, which has about a dozen co-sponsors, is likely to be introduced on Tuesday or Wednesday.
Ram, a Democrat, said the bill targets a broad swath of fossil fuel companies because sponsors haven’t agreed on whether to boycott companies who produce tar sands oil, coal, or whether to focus on another subset of fossil fuel-related businesses, like 350.org’s list of 200 public companies who hold the vast majority of fossil fuel reserves.
“The idea is being a little more aggressive and looking at our investments,” said Ram, who added that already existing policies of the key investment council haven’t necessarily made a big impact on the state’s investment portfolio. Those policies include following the Kyoto Protocol and pursuing environmentally friendly options where possible.
“A lot of our investments are buried in larger management funds, so I don’t think we’ve been able to have as much impact we could have,” Ram said. “In larger management funds, that we empower a manager to oversee, we mostly give them the bottom line on what kind of investment return we’d like to see. We don’t get much say in what we’d like them to invest in.”
The board that oversees investment decisions has representatives from the state Treasurer’s Office, as well as unions like the Vermont State Employees Association.
JP Isabelle, state Treasurer Beth Pearce’s spokesman, said Pearce would reserve comment until the bill is formally introduced.
Isabelle said the Treasurer’s Office, which is responsible for overseeing pensions for state workers, municipal employees and teachers, does not track the proportion of state investment tied up in fossil fuels. The state’s pensions are invested in so-called “co-mingled funds,” which mirror financial indices.
Doug Gibson, spokesman for the Vermont State Employees Association, said his union hasn’t taken a position on the bill yet.
Ram said that according to conversations with Deputy State Treasurer Steve Wisloski, fossil fuels make up a large portion of the state’s investment in commodities, but a small portion of the state’s overall investment.
One concern, Ram said, is ensuring that these external management funds, which are very stable and reliable funds, can be modified in way that doesn’t make the state’s overall portfolio more volatile.
“We don’t want to do anything that jeopardizes people’s hard-earned retirement,” Ram emphasized.
Shumlin’s office didn’t respond to a request for comment. Although Shumlin often speaks about the importance of fighting climate change, his personal investment portfolio, disclosed in 2010, contains oil company stocks. One of the companies has been repeatedly fined for environmental violations.
The proposal comes as climate change activists lead a nationwide campaign of fossil fuel divestment at colleges. Last week, Sterling College became the first Vermont college to distance itself from fossil fuel investments, and the third college in the nation to do so.
Pearson co-chairs the newly formed 22-member House Climate Caucus, along with Rep. Margaret Cheney, D-Norwich.