Politics

Does Mike Pieciak support divestment? It’s ‘complicated.’

Mike Pieciak at podium
Mike Pieciak supports transitioning the state’s public pension investments away from fossil fuels, he said, but "it just comes down to when and how." File photo by Mike Dougherty/VTDigger

Mike Pieciak, the Democratic nominee for Vermont state treasurer, has made climate change a central theme of his campaign and argued that fossil fuels make poor long-term investments. 

But does that mean that, if elected to office, he would work to divest the state’s public pension investments away from fossil fuels, as many environmental activists have for years unsuccessfully called on the state to do? 

“It's a complicated issue, right? But I think everybody should be pro-divestment when you think of the financial risks that it's going to present. So then it just comes down to when and how,” he said in an interview Monday.

Beth Pearce, Vermont’s current treasurer, has long opposed divestment, citing the potential financial risk. Pearce has argued that the state would be better positioned to pressure companies to change course from the inside, as shareholders.

Pieciak, who is facing token opposition in the general election from Republican H. Brooke Paige, says on his website that he supports “transitioning” the state’s investments from fossil fuels to more sustainable sources. Pieciak has said he would like to follow the example of New York state, which announced a sweeping plan in late 2020 to divest its $226 billion pension plan from fossil fuels.

New York’s strategy, per Pieciak’s campaign, has been to contact every company in its portfolio asking the company to disclose its climate impact and describe its efforts to lower its carbon output. If the company does not reply, or if it replies with “an impractical or poorly devised approach to decarbonization,” the investment is pulled, Isaac Dayno, Pieciak’s campaign manager, wrote in an email to VTDigger. The investment remains “if the approach is sound and puts the company on a path to a low/zero carbon impact.”

New York has set 2040 as its target date for fully divesting from companies that contribute to climate change. Pieciak suggested he’d like to see a more aggressive timeline in Vermont, but hesitated to make any hard commitments, citing the risk of “a negative impact to the pension fund.”

“I think it needs to be soon. It’s just hard to give specifics when there’s so much judgment, in my opinion, that has to be brought to the analysis,” he said.

There are also many ways to calculate a company’s carbon footprint, and many major fossil fuel companies have made “net zero” commitments that have been panned by environmentalists

Pieciak said he could see Vermont keeping its investments in a fossil fuel company — if that company has already made dramatic changes to its business model to transition to renewables, and is on a path to get all the way there “over the next five or 10 years.”

“If it's a fossil fuel company that is not fundamentally transitioning this business away from fossil fuels, it hasn't shown no commitment to do so, it has no plan to do so — it's hard to see why you would stay invested in that company,” he said.

That’s not quite good enough for some in the divestment movement. 

“Divestment would be: just selling oil and gas stocks. And it would save him an immense amount of work, since at this point it's clear there aren't 'good' oil companies,” 350.org founder Bill McKibben wrote in an email to VTDigger. “The (New York State) treasurer has a huge staff, and even for him it's a waste of time.”

Pieciak argued he’s “in agreement” with McKibben that there’s “this need to have divestment.”

“It just has to be done in an appropriate way that doesn't put at risk the pensioners or the fund. And if you have a company that's sort of in the middle ground where they are moving toward renewable energy, or they're moving toward a different business model, then there's really no longer an oil company anymore,” he said.

The divestment movement has increasingly been taking aim at the banks that lend to the fossil fuel industry. McKibben said he’d also like to see Vermont take a look at the financial firms that hold state accounts.

“Money in the mainstream banking system is producing huge clouds of carbon,” McKibben wrote.

Vermont’s primary banking partner is M&T, according to the treasurer’s office. A regional bank headquartered in Buffalo, New York, M&T does not even appear in rankings compiled by climate groups targeting the fossil fuel industry’s major financiers. It has also promised to invest at least $1 billion into renewable energy in the next five years. 

But M&T has not wholly divested from fossil fuels, nor has it committed to do so. A corporate responsibility report published by M&T calculated that the bank in 2021 still had $306 million outstanding invested in mining, quarrying, oil and gas extraction. 

The state also has lockboxes with TD Bank, a Canadian multinational which invested $141 billion in fossil fuels between 2016 and 2021.

Pieciak said he’s open to exploring whether Vermont’s banking partners are still serving the state’s interests and align with its values. And he said there are other ways the financial services sector intersects with climate. He points, for example, to cryptocurrencies like Bitcoin, which require unexpectedly large amounts of energy to produce, and said he’d like to see the Legislature consider a tax on cryptocurrency transactions to fund climate initiatives.

“Those are the kinds of things that we should be thinking about,” he said. “How do we incentivize either having more resources to build out our lower carbon economy or de-emphasize money and the transactions happening with those that are really creating a much more significant problem in terms of adding carbon to the atmosphere?”

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Lola Duffort

About Lola

Lola Duffort is a political reporter for VTDigger, covering Vermont state government, the congressional delegation and elections. She previously covered education for Digger, the Concord Monitor in New Hampshire and the Rutland Herald. She has also freelanced for the Miami Herald in Florida, where she grew up. She is a graduate of McGill University in Canada.

Email: lduffort@vtdigger.org

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