This commentary is by Beth Sachs, a co-founder of the Vermont Energy Investment Corp. She served as its executive director for 22 years.
I have been working to mitigate climate change for 50 years, experiencing the 1972-73 oil embargo, Al Gore’s “An Inconvenient Truth,” Hurricane Katrina and now so many more “unnatural” environmental disasters wreaking havoc around the world.
The more I learn, the more terrified I become about how climate change will affect all life on the planet in ways we are finally beginning to understand and accept. I have to hope that it’s not too late to do something about it before the Earth cannot sustain life.
We are at a point now where we have no more time to ignore this and must do everything we can to stop and reverse global warming.
One of the myriad actions we need to undertake is to stop burning fossil fuels, so we must: a) stop all future investments in the fossil fuel industry, b) rapidly divest from our current holdings, and c) invest in clean, renewable energy.
Fossil fuels are driving catastrophic climate change that disproportionately impacts rural and marginalized, disenfranchised and disinvested communities. Climate change is also creating a critical public health problem, making many existing diseases and conditions worse and helping pests and pathogens spread into new regions. Research from Harvard University recently found that one in five deaths worldwide are due to the burning of fossil fuels, resulting in huge costs to our health care system.
We need to pass the Fossil Fuel Divestment bill (S.42 and H.197). This legislation would require the Vermont Pension Investment Commission to make a plan and implement divestment of the state employee pension funds it manages from fossil fuel companies. These actions are crucial to both protect the state’s pension funds and to protect the environment, and they will contribute to our meeting the goals of our state’s Climate Action Plan.
We can do this without negative impact on pension holders or taxpayers. From the experiences of numerous other funds that have divested without losing value, it’s clear this is doable.
Recent reports show that divestment would not be detrimental, and in some cases would actually result in increased income. For example, an analysis of Colorado’s pension fund over the 10-year period ending in November 2022 shows that it would have earned an additional $2.7 billion in returns if it had divested from fossil fuels.
A recent report titled “Two Economies Collide: Competition, Conflict and the Financial Case for Fossil Fuel Divestment” from the Institute for Energy Economics and Financial Analysis clearly predicts a decline in fossil fuel
assets over the long term: “Weak economic performance and an unstable future for fossil fuels have made it clear that divestment can be achieved without financial harm to any individual investment fund.”
Other recent reports have reached the same conclusion. The investment firm BlackRock concluded that divested portfolios “experienced no negative
financial impacts” and “outperformed their benchmarks.”
Vermont pension funds will face similar losses if the Vermont Pension Investment Commission does not divest soon from fossil fuels; therefore, the fiduciary obligation of the commission — to maximize the value of the pensions it manages — requires that it divest from fossil fuels.
And we are not alone in taking this action. An estimated 1,500 funds worldwide have now committed to divesting more than $40 trillion from the fossil fuel industry, including the state and city of New York, the state of Maine, the province of Quebec, and the Vatican.
If we can hope that our children and grandchildren will survive and thrive on this planet, we need to keep fossil fuels in the ground, and we cannot continue to support the growth of the fossil fuel industry. We need to divest now.
