Share
De Blasio exaggerates fossil fuel claims on the campaign trail

De Blasio exaggerates fossil fuel claims on the campaign trail

On the campaign trail and in campaign literature, Bill de Blasio has painted fossil fuel divestment as a fait accompli. | Demetrius Freeman/Mayoral Photography Office De Blasio exaggerates fossil fuel claims on the campaign trail By DANIELLE MUOIO 08/14/2019 05:02 AM EDT Share on Facebook Share on Twitter As climate change becomes a central focus…


Bill de Blasio | Mayoral Photography Office

On the campaign trail and in campaign literature, Bill de Blasio has painted fossil fuel divestment as a fait accompli. | Demetrius Freeman/Mayoral Photography Office

De Blasio exaggerates fossil fuel claims on the campaign trail

As climate change becomes a central focus of the 2020 Democratic primary, Mayor Bill de Blasio has touted his mayoral record on the environment, often repeating the claim that the city has pulled $5 billion out of fossil fuel holdings from its pension fund.

“I’m proud to say in New York, we’ve divested $5 billion dollars from the oil companies, from the fossil fuel industry,” the mayor said just this past Sunday in Iowa. “We have to be the party that says, ‘yes we’re experiencing global warming and we can do something about it.’”

Story Continued Below

But for a man fond of saying he doesn’t deal in “hypotheticals,” the mayor’s divestment claim is just that: The city has not divested any pension money from the fossil fuel industry. So far, it has only announced its intention to study the issue — an analysis that has not yet begun. Moreover, de Blasio doesn’t control whether or not the city will ultimately pull the money out of fossil fuel holdings.

The city’s roughly $199 billion pension system is made up of five separate funds, each governed by its own board of trustees. The trustees would need to approve any proposal to divest — and while a mayoral representative gets a vote on each board, de Blasio doesn’t control the majority on any of them.

For some trustees, whether or not to vote for divestment is still up in the air until the city’s study is complete.

“The prudent thing to do when it comes to funds and pensions with this enormous responsibility is to do a study, not do a knee-jerk reaction because you think it gets you a few political votes because it looks like a good progressive issue,” said Greg Floyd, president of Teamsters Local 237 and a trustee of the board of the New York City Employee Retirement System — the city’s largest pension fund.

The de Blasio campaign declined to comment on why he’s claiming to have accomplished something that is still years off, at best.

But on the campaign trail and in campaign literature, de Blasio has painted fossil fuel divestment as a fait accompli.

Under climate “accomplishments” on his campaign website, de Blasio’s first bullet point states that he “oversaw divestment of the City’s pension funds from fossil fuels, making New York the first major American state or city to do so, and doubled investments in climate solutions to $4 billion.”

The claim the pension funds have invested more money into “climate solutions” is also a stretch. De Blasio in September set the $4 billion goal, but that target has not yet been achieved. The five boards have voted to make some investments in climate solutions, a spokesperson for the comptroller’s office said, but have not publicly announced how much.

In January 2018, de Blasio and city Comptroller Scott Stringer announced their support of fossil fuel divestment and set a goal of divesting $5 billion from fossil fuel holdings before the end of 2022. Shortly thereafter, they submitted a resolution to the pension trustees to study “prudent steps” to divest and evaluate anticipated risks to the portfolio.

Only three of the five boards — NYCERS, Teachers’ Retirement System and the Board of Education Retirement System — voted to approve the resolution to study the issue.

Almost a year later, Stringer and de Blasio put out a request for proposals for advisers to conduct the divestment study. Responses were due on Feb. 8 and city officials have not yet announced the results.

The process has taken longer than past divestment efforts.

NYCERS divested from corporations that run private prisons a year after the board approved a study to evaluate the effort’s financial impact on the pension. The pension fund also divested from companies that sell firearms a year after a proposal was put up for a vote.

There are challenges that have made withdrawing support from fossil fuels a lengthier process than past divestment efforts. For one, it’s difficult to define what constitutes a fossil fuel company, said a source familiar with the process who would only speak on background. A consultant would have to set parameters, presumably looking at factors like how much of a company’s revenue stream comes from fossil fuels — a threshold that could meet opposition.

It’s also a much larger undertaking than past divestment efforts and there isn’t a comparable precedent set by prior pension systems for the city to analyze, the source said. Oil companies are some of the largest publicly traded companies in the United States, making the impact to the portfolio more significant than divesting from private prisons.

Divesting from fossil fuels has proven a tough sell even in blue states, with pecuniary concerns largely trumping environmental advocacy. California and Seattle, two states known for aggressive environmental policies, did not move forward with efforts to divest their pension funds.

Washington D.C.’s largest pension fund — the District of Columbia Retirement Board — is the only fund to divest the entirety of its fossil fuel stock. The board in 2016 dropped $20 million in fossil fuel holdings, a fraction of its $6.4 billion fund and much smaller amount than New York is seeking.

The San Francisco Employees Retirement System approved partial divestment in 2018, withdrawing a total of $8.5 million from five companies out of its $25.5 billion fund.

Whatever pension trustees ultimately decide, the five-year timeline means any action will occur after de Blasio leaves his mayoral post — and long after his current presidential bid comes to a close.

Stringer said the comptroller’s office is going “step-by-step” to achieve the city’s divestment goal.

“New York City is planting the seed for a clean, green, and thriving economy that can truly support future generations,” Stringer said in a statement. “In accordance with our fiduciary duty, we’re taking our first-in-the-nation divestment goal step-by-step to safeguard both the retirement security of our city’s workers and the future of our planet.”

Natural Gas

  • Renewables
  • Energy
  • Energy
  • Environment
  • Bill de Blasio
  • Economic Development
  • Renewables
  • Energy
  • Environment
  • Scott Stringer
  • Bill de Blasio
  • Economic Development
  • New York Education

    Education Morning Newsletter

    Delivered daily by 6 a.m., New York Education is your guide to the day’s top education news and policy in Albany and around the Empire State.

    Albany Pro

    Our morning email with must-read analysis and breaking news on state news and politics.

    City Hall Pro

    A morning email with must-read analysis and breaking news on city news and politics.

    New York CEO Report

    POLITICO New York Pro’s high-level outlook on the policy issues driving the month in New York State.

    Documents

    Original federal and state policy documents

    De Blasio offers lucrative post to a member of NYCHA monitor team

  • Vaccination law opponents make case for overturning repeal at Albany hearing
  • Cuomo proposes revisiting definition of ‘domestic terrorism’
  • Eliot Engel, Michael McCaul condemn China threats as unrest in Hong Kong grows
  • Trump offers to try again in lawsuit over New York tax returns
  • Read More