On Wednesday, in advance of Earth Day, Rhode Island General Treasurer Seth Magaziner announced a nearly 50 percent decrease in the Rhode Island pension fund’s exposure to companies that engage in the production and distribution of fossil fuels by this summer. The Treasurer made the announcement at Save The Bay in Providence, and was joined by Save The Bay Executive Director Jonathan Stone, Environment Council of Rhode Island (ECRI) President Priscilla De La Cruz, Senator Dawn Euer (Democrat, District 13, Newport, Jamestown), Representative David Bennett (Democrat, District 20, Warwick), Johnathan Berard, state director of Clean Water Action and Sue AnderBois at The Nature Conservancy.
“To continue delivering on the promise of retirement security for all 60,000 members of the Rhode Island pension system, and for all taxpayers, we must invest in the economy of the future,” said General Treasurer Seth Magaziner. “As we celebrate Earth Day this week, I was pleased to announce that the pension fund has made significant progress towards this goal with a near-fifty percent reduction in the fund’s exposure to fossil fuels by this summer. I believe that over the course of the next decade, the pension fund’s exposure to fossil fuels can approach zero as the world shifts toward cleaner and more sustainable energy sources.
“To be more specific about it,” continued Treasurer Magaziner, “when we took office in 2015 roughly six percent of the pension was invested in companies that derive the majority of their revenue from producing fossil fuels, transmitting them or serving the fossil fuel industry. That number is now on pace to go from six percent to three percent, roughly, by this summer.”
“We are doing this because it is a smart investment. Keep in mind that as we’ve been doing this, we have outperformed most of our peers and managed the pension fund to an all time high.”
“Under Treasurer Magaziner’s Back to Basics investment strategy, the Rhode Island pension fund has consistently outperformed its peers and reached an all-time high of more than $9.5 billion. In order to continue to strengthen the fund’s performance, the fund must continue to invest in clean energy and not in the large-scale burning of fossil fuels,” said the Treasurer in a press statement.
“Good policies that reduce our dependence on fossil fuels, like decreasing the exposure to fossil fuels in the Rhode Island pension fund, are important steps towards facing the climate challenge, protecting our environment, our health, and our state’s fiscal health,” said Priscilla De La Cruz, President of ECRI. “There is big economic opportunity in continuing to disinvest in fossil fuels and reinvest in clean energy, and in adaptation and resilience to protect the people and places we love.”
UpriseRI asked about environmental activists work to push financial institutions like Chase Bank and TD Bank to stop investing billions in fossil fuel infrastructure investments. How does the Treasurer’s announcement relate to this effort?
“When it comes to banks our strategy has been one of engagement rather than divestment,” said Treasurer Magaziner. “As investors we have the ability to vote on who the board of directors are at these banks and we have th ability to vote on their executive compensation plans, up or down. So we’ve engaged th banks in a number of ways, specifically on climate, through those methods.”
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UpriseRI followed up by noting previous examples of the Treasurer divesting from specific industries, such as assault weapon manufacturers and for profit prisons. Are there other areas of concern he might like to divest from in the future?
“What I think we’re going to do from here is look at doing a more comprehensive review of the entire pension fund and our exposure to environmental and social risks, as a process … that I think will play out over the next year – and we’ll see where it leads us. I don’t want to pre-judge what those results will be.
“Rather than just addressing the issues as one offs, I think the time has come to take a comprehensive look at the environmental and social profile of how we invest and see what recommendations come out of that.”