BELLOWS FALLS — I'm writing in response to Joyce Marcel's interview with State Treasurer Mike Pieciak on divestment of fossil fuels from our state's pension funds. As a retired school teacher with a pension in the Vermont State Teachers Retirement System, I have a personal financial interest in this.
As a citizen of Vermont who is very concerned about the effects of climate change on our future, I want us to do whatever is necessary to reduce and begin to reverse global warming. There is no conflict between my two positions.
The fossil fuel divestment bill (S.42 and H.197) currently before our state Legislature, unlike prior versions, is written to address any concern that divestment might hurt the value of the pension funds.
The bill does not call for divestment at any cost. Instead, it would require the Vermont Pension Investment Commission (VPIC) to create a plan for divestment “in accordance with sound investment criteria and consistent with fiduciary obligations.”
This means that Vermont's divestment would have to be accomplished in a way that does not negatively impact either the pension holders or the taxpayers. From the experiences of numerous other funds that have divested without losing value, it is obvious that this is possible.
Recent reports show that divestment would not be detrimental, and in some cases would actually result in significantly more income. For example, an analysis of Colorado's pension fund over the 10-year period ending Nov. 22, 2022 shows that it would have earned an additional $2.7 billion if it had been divested from fossil fuels.
Several factors make continued investment in fossil fuels a poor choice financially. More than 1,500 funds worldwide have now committed to divesting more than $40 trillion from the fossil fuel industry. That sell-off is continuing to expand, and it will have an increasingly negative effect on the value of fossil fuel holdings.
In addition, the falling costs of cleaner alternatives, as well as environmental concerns, are leading customers away from fossil fuels. More policies and regulations are also increasing costs for the fossil fuel industry. It's clear that past performance for an industry that is being systematically phased out is no longer a good indicator of future performance!
The environmental benefits of divestment are also clear. The fossil fuel industry is capital intensive and needs a continual supply of money to allow companies to explore, develop, and expand further fossil fuel reserves.
Finding new oil and gas to put “in the pipeline” will only tempt us to use it, when what we need to do is to radically cut our use of fossil fuels.
The industry is now acknowledging to their shareholders the risk posed by divestment. In Shell's 2018 annual report, the company identified a continuing divestment movement as having “a material adverse effect on the price of our securities and our ability to access equity capital markets.”
In addition, divestment in Vermont will send an encouraging message to other states to join the growing list of states, municipalities, and nations around the world that have already divested.
I chose to be a teacher because I chose to invest in the future. I put my time and energy and heart into giving students the knowledge and skills they would need to face their future. Now I want to ensure that they have a future to live into.
In his interview, Pieciak “said he believes the state should be doing everything in its power to combat climate change.” I agree with him on that! And this divestment bill is one easy step for us to take that will help us do just that. Please support it.