Quote: Svitlana Krakovska, Ukraine’s leading climate scientist
- Action #1 – FEDERAL: Tell Biden and your federal legislators to declare a CLIMATE EMERGENCY – we need to untangle ourselves from a fossil fuel addiction that keeps us hostage to dictators and greedy, unscrupulous corporations.
- Action #2 – LOCAL: Help Ventura County residents ensure safe drinking water for all with “YES on A&B!”
- ACTION #3 – STATE: DIVEST billions of fossil fuel investment from CalPERS and CalSTRS with SB-1173.
Gaslighted – our grim addiction to an amoral industry.
- They are an expensive habit – Governments pay fossil fuel companies billions of dollars in subsidies a year – almost $5 TRILLION from 2010-2020, money that could have been invested in renewable energy resources.
- They take with both hands – In the US, “dozens of special tax loopholes save the oil and gas industry BILLIONS every year on the backs of taxpayers while putting …communities and nature at risk from pollution and climate change,” with some paying NO FEDERAL TAXES AT ALL. Meanwhile, “they use our roads and our electrical grid and our police protection locally and our military protection globally ($1Tn a year for US to keep that up to protect Exxon’s interests overseas) We educate their employees and we fund their retirement….”
- They continue to gaslight us – Exxon deliberately withheld their studies of global climate change due to fossil fuels. Instead, they spent over more than $30 million on think tanks that promote climate denial, deception comparable to the lies spread by the tobacco industry, except that the harm caused is on a global scale.
- They’re willing to let Americans suffer – Before winter set in last year, reporters found gas companies were deliberately sending large amounts of gas abroad in order to limit supply and raise prices for heating bills, hurting low-income families.
- Their influence is devastating – Murray Energy sent an hitlist of environmental regulations to an eager Trump administration. More recently, Spire Energy, a gas utility, “…privately reached out to challenge the electric vehicle provisions” in proposed building codes for new construction nationwide.
- They never get enough – Due to reports that top oil and gas companies made $174 billion in 2021, while raising dividends and paying CEOs tens of millions of dollars and that Exxon Mobil reported profits of $8.9 billion, its highest earnings in seven years, President Joe Biden asked the Federal Trade Commission to investigate whether these companies were engaging in antitrust behaviors in order to pad profits under the guise of inflation.
- It’s up to us to change this – Apathy from political leaders and the continued use of fossil fuels are to blame for climate change and human suffering. António Guterres, secretary-general of the United Nations emphasized. “Coal and other fossil fuels are choking humanity.”
Action #1 – FEDERAL: Tell Biden and your federal legislators to declare a CLIMATE EMERGENCY – we need to untangle ourselves from a fossil fuel addiction that keeps us hostage to dictators and greedy, unscrupulous corporations.
The science is clear that we have very little time left to make the drastic changes needed to avoid the worst impacts of the climate crisis.
Minimal script: “I’m calling from [zip code] and want President /Rep./Sen. [___] to know I’m very concerned about the climate crisis. (Extra script here)
I expect President Biden to use the full powers of the executive branch to begin addressing the climate crisis. It is critical that the White House declares a climate emergency and mobilizes our nation’s resources to transition to clean renewable energy and create millions of good paying green jobs.”
Extra script if you want it: America’s addiction to fossil fuels is a weakness – we’re being held hostage by both dictators and greedy energy companies that are concerned only with their own bottom line, not the future of our country or the health of my family or community.
(Click here to see if your Senator has called on the White House to declare a climate emergency. (There are (2) page tabs. So far, none of our legislators have signed on.)
Extra Credit Actions!
Action #2 -LOCAL: Help Ventura County residents ensure safe drinking water for all!
(2) Saturdays – 03/12/2021 and 03/19/2021 – PHONE BANK – ”Food & Water Watch – Voter Protection Phonebanks with Common Cause” (10:00 am – 11:30 am PT)
(Food & Water Watch) In 2020, Ventura County residents won big when the Ventura County Board of Supervisors voted to close a loophole that has allowed oil companies to drill through our water aquifers without environmental review. So many oil wells in the county are drilled under this reckless loophole!
But now Big Oil interests want to undo our progress.
Corporations, like Aera Energy*, have raised $1.5 million, hired out-of-county petitioners to gather tens of thousands of signatures, and put a referendum measure on the Ventura County ballot this June that could overturn this decision.
We need your support to fight for safe water in Ventura County!
Join us online to call voters together — we’ll let them know what’s at stake so they’re prepared to vote YES on Measures A & B this June.
Mobilize link: https://www.mobilize.us/fww/event/443711/
* Note: Aera is not a little “mom-&-pop” oil company.
- (Wikipedia) Aera Energy LLC is jointly owned by Shell plc …and ExxonMobil, one of the largest multinational companies in the world. Aera is, by itself, one of California’s biggest oil and natural gas producers, with an approximate 2015 revenues of over $2 billion.
- A pollution lawsuit, filed October 2001, alleged Aera Energy allowed 600 million barrels of oil wastewater to seep into the subsurface aquifers of the Starrh Farms after putting oil drilling waste into a mile of unlined percolation ponds near the farm. After numerous legal battles, Aera Energy was found liable and ordered to pay $9 million.
- On their website, it states “At Aera, we are relentless in our efforts to produce energy safely and in an environmentally responsible way.” Apparently, just not when they’re REQUIRED to.
ACTION #3 – STATE: DIVEST billions of fossil fuel investment from CalPERS and CalSTRS with SB-1173.
SB 1173 The Fossil Fuel Divestment Bill would require force two of the worlds largest pension funds – CalPERS and CalSTRS- to divest from all fossil fuel companies. Our pension funds are at great risk being so heavily invested in fossil fuels, a declining and toxic industry which is out of touch with CA’s environmental goals. As public employees, retirees, and community members, we demand that CalPERS divest immediately from fossil fuels.
Minimal script: “I’m calling from [zip code] and I want Senator [___] to support the SB1173 – The Fossil Fuel Divestment Bill.
Extra script if you want it: Our state should take no part in providing institutional cover to fossil fuel companies and I support the 200,000 union members and beneficiaries of CalPERS and CalSTRS that have asked for divestment.
Why is divestment the right answer? FAQ on Fossil Fuel Divestment Bill
How much money are we talking about?
The California Public Employees Retirement System is the largest pension fund in the USA with over $400 billion in investments serving 1.9 million members. CalPERS has $30 billion invested in fossil fuels, endangering the health of communities around the world while profiting off of climate destruction. And if we were only worried about the money – If they had divested 10 years ago, they may have increased their profits by $11.9 billion!
How do CalPERS and CalSTRS constituency groups feel about fossil fuel divestment?
Close to 200,000 union members and beneficiaries of CalPERS and CalSTRS have passed fossil fuel divestment resolutions, including the United Teachers Los Angeles, the California Federation of Teachers, and the California Faculty Association, and the Faculty Association of the California Community Colleges.
Is divestment effective?
The goal of divestment is to take away the social license of the fossil fuel industry, to diminish their political impact in slowing legislation to address the climate crisis. The industry is the main brake on climate legislation in California and nationally. In the cases of divestment from the apartheid regime in South Africa and tobacco, divestment proved to be a very effective strategy for shifting political power to allow for change.
Will this have a negative impact on returns and the solvency of CalPERS and CalSTRS?
The argument that it will hurt return has been thoroughly refuted, most recently in a report by investment advisors Meketa and BlackRock. In a pre-COVID study that compared the funds’ return if they had divested in 2009 and spread the investment across the rest of the portfolio compared to actual value in 2019, it was found that CalPERS would have been $11.9 billion richer, and CalSTRS would have gained an additional $5.5 billion.
Isn’t it better for CalSTRS and CalPERS to engage with fossil fuel companies:
According to former SEC commissioner Bevis Longstreth, “Indeed, engagement is likely to assist Big Oiland Big Coal in postponing the day when governments limit the burning of fossil fuels. The International Energy Agency reckons that, if governments act to compel adherence to the “carbon budget” necessary to have a chance of holding the planet to only a 3.6 F rise in temperature from pre-industrial levels, it will cause Big Oil and Big Coal to lose about $1 trillion a year. Engagement with institutional investors like Harvard gives the fossil fuel giants the protective cover they need to stretch out the transition process to renewables for as long as they can. It legitimizes talk over action….There are some ESG issues (i.e. environmental, social, and governance issues) where shareholder engagement has been tried and been successful. However, the closer one comes to trying to affect core business issues or issues involving the safety, security and compensation of officers and directors, the less successful engagement becomes. In fact it’s a bust. Thus, for example, trying to convince Phillip Morris to give up making cigarettes or Johnny Walker to abandon its distilleries will most certainly be a fool’s errand….It is for this reason that divestment became the tool of choice in addressing tobacco companies. And companies heavily engaged in profitable businesses in South Africa under apartheid. In regard to fossil fuel companies directly engaged in extractive activities, it is unrealistic to imagine them being swayed by shareholder arguments to get out of their core business of exploring for, extracting and selling carbon-emitting fuel.”
For a more in-depth set of responses to the shareholder engagement argument see this article.
Is CalSRTS and CalPERS Divestment is aligned with Governor Newsome’s Climate Agenda
The Governor’s Executive Order on Climate Change (EO N-19-19) calls on CalSTRS to “leverage the state’s $700 billion investment portfolio to advance California’s climate leadership, protect taxpayers, and support the creation of high-road jobs.” The single greatest step the pension funds could take would be to sell off its fossil fuel portfolio.
Institutions divesting from fossil fuels
Worldwide 1,500 institutions with over 39 trillion in assets have committed to divestment including:
- Public employee pension funds: State and City of New York, State of Maine, the province of Quebec.
- Universities: California State University and U.C. systems, Harvard, USC, and SF, Chico and Humboldt State.
- Religious organizations: the Vatican, United Church of Christ, Episcopal Church USA, Unitarian Church,
- World Council of Churches.
- Organizations representing CalPERS or CalSTRS recipients calling for divestment
- California Faculty Association; California Federation of Teachers; Sixteen California Teacher
- Association chapters including Oakland (OEA), San Diego, San Francisco, and Los Angeles (UTLA);
- Faculty Association of California Community Colleges; Local 743 of SEIU 1000; CSU Emeritus and
- Retired Faculty and Staff Association; and the Academic Senate of California State University.
What is the Social Cost of Carbon?
Divestment aims to decrease emissions of GHGs and toxics, which are the primary cause of climate change. These emissions impose a Social Cost of Carbon (SCC) upon society. There is widespread scientific consensus that the SCC will continue to increase annually unless we achieve deep decarbonization. Per California Air Resources Board, a total of 424 million MT (MMT) of carbon dioxide equivalent (CO2e) was emitted in 2017. The total annual SCC from CA emissions is 424 MMT CO2e x $150/MT CO2e = $63,600,000,000 ($63.6 billion).
How does divestment minimize risk in CalPERS and CalSTRS Portfolios?
During the period from 30 June 2014 to 30 Nov. 2021, the largest fossil fuel funds had a negative total return (including dividends) in contrast to the positive total return of the SP500 and each of the other 8 sectors. This confirms the financial risk of investing in fossil fuel energy. The global divestment initiative began in 2012, but did not develop much momentum until 2014. Also, scientific verification of climate change has increased substantially since 2014. CA will benefit most by divesting promptly, before the burgeoning popularity of divesting triggers steeper losses. The sector with the highest Beta (risk) and lowest Alpha (return relative to the SP500) is fossil fuel energy. Thus, all other sectors have a superior risk: reward ratio. In contrast to the absence of published empirical research verifying the efficacy of engagement, there is a growing body of research on divestment from fossil fuel securities. Divestment, but not engagement, may be used to decrease the risks (e.g., Beta, poor returns, and climate) to a portfolio. Nearly all research finds that divestment from the fossil fuel sector either does not change total return or increases total return. Thus, it is a promising way of improving risk-adjusted returns and meeting fiduciary responsibilities.