Can the Fossil Fuel Divestment Movement Win in Oil-Rich Colorado?

For over a century, fossil fuels have been more than just the world's primary energy source; they've been a bedrock of the global financial system, an engine of economic growth and a safe investment for governments, pension funds, charitable endowments and other institutions around the world. If we hope to stop climate change before its effects become catastrophic, that will inevitably have to change — and many climate activists want it to change as soon as possible.

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Deb McNamara
New Bill Introduced: HB19-1270 - PERA Public Employees' Retirement Association Board Assess Climate-related Financial Risks

A new bill was introduced in the House this week: HB19-1270 - ‘PERA Board Assess Climate-related Financial Risks.’ This bill places a requirement that the board of trustees of the public employees' retirement association take certain actions in connection with climate-related financial risks to the various trust funds managed by the association.

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Deb McNamara
Arabella Advisors Report: 61 Pension Funds Worldwide Have Committed to Divesting from Fossil Fuels

According to a report issued in 2018 by Arabella Advisors, a philanthropy services firm, 61 pension funds worldwide — including the New York City pension funds, which hold $189 billion in assets — have committed to divesting from fossil fuels since 2016, bringing the total number of pension funds that have joined the movement to 144. Some research indicates that fossil fuel-free investments could offer better returns than conventional ones, though other experts say that fund performance will depend on a variety of market factors.

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Deb McNamara
PERA's January 2019 Statement on Divestment

In 2018, the PERA Board spent nine months considering the topic of divestment and seeking input from fiduciary counsel, investment consultants, and PERA staff, as well as hearing from members and retirees. At the January 2019 Board of Trustees Meeting, the Trustees adopted a Statement on Divestment. Read on for more information.

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Deb McNamara
2018 Ends with Energy Sector in Last Place in the S&P 500

2019 expectation is for more investment with lower returns. One cannot minimize the impact of the overall year-end market decline on energy sector stocks, which went down along with every other sector. For example, Apple’s market cap declined from $1.1 trillion in June to $750 billion at the end of the year. That loss alone is more than the current market cap of ExxonMobil, the largest U.S. oil and gas producer.

The bottom line: for the second straight year, the stock performance of the energy sector was at or near the bottom of the S&P 500 – and in 2018, it was solidly in last place.

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Deb McNamara
Exxon Lawsuit is a Wake Up Call for the NY State Pension Fund

New York state is suing Exxon-Mobil for fraudulently misleading investors about climate change. Records show that Exxon knew decades ago that climate change would negatively impact its business and did not disclose it. This resulted in an over-valuing of the company, which has hurt its investors. The New York State Common Pension Fund is one of those investors, to the tune of $1 billion.

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Deb McNamara
Divestment 101: FAQs

A 10-point FAQ primer on a new mindset around energy sector holdings. The fast-moving evolution of the energy sector is changing investor minds and altering capital market flows. This shift raises as many questions about where things are going as it does about the status quo. A report we published earlier this summer—“The Financial Case for Fossil Fuel Divestment”—takes a stab at addressing the topic practically and in a way meant especially to help fund managers and trustees navigate this new landscape.

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Deb McNamara
IEEFA update: The investment rationale for fossil fuels falls apart

For decades, the fossil fuel sector literally fueled the global economy and powered the world’s investment markets. This is no longer the case. The long-standing and now outdated investment thesis around fossil fuels—that such holdings would make large and reliable annual contributions to institutional funds—has crumbled. The sector now lags the broader market, and the one-time assumption that an oil and gas company’s value equaled the number of barrels of oil, or reserves, it owned has collapsed alongside the core steady-returns rationale for investing in the sector.

A new paradigm is emerging: Cash, revenue, and profits matter, and risks cannot be ignored.  

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Deb McNamara