ICLEI USA and NYC release first in-depth case study on NYC’s fossil fuel divestment decision

11 September 2018, San Francisco, California, USA - Today at the Global Climate Action Summit in San Francisco, ICLEI - Local Governments for Sustainability USA and the New York City Mayor’s Office released a new case study detailing why and how New York City has begun to divest billions of pension fund dollars from fossil fuels. NYC’s retirement system is the largest municipal pension system in the United States, controlling a total of USD 194 billion in investments. This case study is the first in-depth look at this decision since Mayor Bill de Blasio made the announcement in January.

New York City Moves to Divest from Billions of Dollars in Fossil Fuel Reserves” shows that the principles and processes behind fossil fuel divestment are transferable to nearly any city, large or small, where the will to divest exists.

“Cities are on the front lines of climate change, which is why mayors and other local leaders must embrace bold solutions that protect our residents and pension holders alike,” said Mayor de Blasio. “New York City is proud to take a stand against fossil fuel companies by leading the charge with our divestment strategy. At the same time, we are sharing our knowledge and expertise with cities around the world through our new partnership with London and C40 Cities.

”When NYC Mayor Bill de Blasio, Comptroller Scott Stringer and several trustees of the city’s pension funds announced the city would divest from fossil fuel reserve owners by 2022, the move positioned NYC at the center of the divestment movement. Over the past few years, many cities, from Berlin to Berkeley and Melbourne to Dunedin, have announced similar intentions — but none at the scale of New York City. The announcement came after several years detailed financial analyses and in-depth consultations with pension board trustees. This study demystifies that process with insight from city staff, climate activist groups including 350.org and city networks.

“As one of ICLEI’s longest standing members, New York City sets a strong example for our global network of more than 1,500 local and regional governments worldwide. The city's divestment action is another demonstration of its ambitious climate track record and is bringing the city one critical step closer to climate neutrality. At ICLEI, we call on our network to divest and end the fossil fuel era, building a climate neutral world before mid-century,” said Gino Van Begin, Secretary General, ICLEI - Local Governments for Sustainability.

"New York City's decision shows that divestment isn't scary — it's practical,” said Bill McKibben, Co-founder and Senior Adviser at 350.org. “Since the beginning of the divestment movement, 350.org has said that it doesn't make sense for cities to be spending billions of dollars preparing for the impacts of climate change while investing billions more in fossil fuels. That the financial centers of the world are now taking this step is particularly important, because the people who understand how money tends to flow are standing behind the decision to divest."

“New York City manages some of the biggest and most complicated pension funds in the world. If divestment can work here, it can work anywhere,” said Daniel Zarrilli, NYC’s Chief Climate Policy Advisor and OneNYC Director. “This case study by our partners at ICLEI demonstrates that Mayor de Blasio’s strong leadership combined with sustained engagement by grassroots activists were critical components in New York City’s fossil fuel divestment. We’re committed to helping other cities that want to leverage their investments to fund the fight against climate change and accelerate the transition to a carbon-free economy.”

“New York City is a leader in the divestment movement,” said Angie Fyfe, Director of ICLEI USA. “ICLEI is a strong proponent of shedding the legacy of fossil fuels. Every city has a role to play. We look forward to helping our network cities to take the lessons of New York City and be inspired to apply them in their local context.

”New York City’s fossil fuel divestment announcement follows more than a decade of aggressive climate action. Guiding the city’s climate and sustainability program is One New York: The Plan for a Strong and Just City (OneNYC). OneNYC addresses climate mitigation alongside economic development, diversity and inclusion — and sustainability more broadly — to form an overarching resilience strategy that calls for an 80 percent reduction in greenhouse gas emissions by 2050, compared to 2005 levels. The city is on its way to achieving this goal, having already reduced emissions 15 percent below baseline. The path to achieve these deep emissions reductions is outlined in NYC’s 1.5°C climate action plan, which aims to bring the city’s actions in line with the Paris Agreement's 1.5-degree Celsius target.

Quick facts

  • Representing 715,000 members, retirees and their beneficiaries, NYC’s five pension funds control a total of USD 194 billion, making it the largest municipal pension system in the United States.
  • In general, investments in diversified mutual funds and 401Ks can include up to10 percent in fossil fuel reserves. For NYC’s large retirement system, these investments are preliminary calculated at USD 5 billion.
  • Across the five pension systems, the top 10 contributors to the portfolio’s greenhouse gas emissions accounted for only about 2 percent of holdings value while contributing 20 percent of emissions.
  • NYC owes its success in part to prior experience divesting from corporations with holdings in gun retailers, private prisons and coal.

The full report is available in web format here and PDF here.


Contacts

Kale Roberts, Program Officer, ICLEI USA

kale.roberts@iclei.org +1 845 464 3682

Jen Bogle, Head of Global Communications, ICLEI World Secretariat

jen.bogle@iclei.org +49 228 976 299-16

Phil Ortiz, Assistant Director for Press and Communications, New York City

POrtiz@cityhall.nyc.gov +1 212 748 0386

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