Gov. Shumlin and Vermont Businesses Join Together to Support Divestment
MONTPELIER – February 3, 2016 – Gov. Peter Shumlin stood with Vermont business and education leaders today who support his call for Vermont to use divestment as a tool to help combat global warming. The Governor made the call in his State of the State address earlier this year for Vermont to follow California’s lead in divesting state pension funds from coal assets. The Governor also urged that the state go further and divest from ExxonMobil assets.
Joining the Governor were Seventh Generation, Ben and Jerry’s, SunCommon, Sterling College, and Clean Yield Asset Management. Vermont Businesses for Social Responsibility also endorsed the Governor’s divestment call.
The Governor pointed to Vermont’s history of using divestment as a tool to tackle big challenges. In 1986, the Legislature passed and Gov. Madeline Kunin signed into law an act directing the pension funds to divest from companies doing business with South Africa in response to Apartheid. In 1997, then Treasurer Jim Douglas used divestment to get the state out of the Big Tobacco business with the support of the legislature. In 2007, Vermont divested state pensions of companies doing business with the government of Sudan in response to the humanitarian crisis in that country.
“We have used divestment in the past to address challenges that stretch beyond our borders,” Gov. Shumlin said. “We should do so again to combat global warming, which threatens our way of life, our economy, and the livability of our planet.”
Global warming could have a devastating impact on the world’s economy. Citi found that the impact of unmitigated warming on global gross domestic product (GDP) could be a staggering $72 trillion. Vermont recently got a preview of economic disruptions that can occur from a warming planet after the mild holiday season led to a 5.7 percent decline in leisure and hospitality jobs in December.
In addition to being the single largest contributor to global climate change in the United States, the economics of coal point to a rapidly dying industry. Citigroup found that the movement to limit global warming, especially in light of the Paris accord, could mean $100 trillion in stranded assets. Vermont has already forgone returns by staying invested in coal. According to research conducted by Eric Becker, chief investment officer of Clean Yield Asset Management in Norwich, Vermont pension funds forwent $3.8 million in returns over the last three years by remaining invested in coal.
“The evidence is mounting that divesting from fossil fuels, and coal in particular, is a prudent step for pension fund fiduciaries,” said Eric Becker, “It can be done without sacrificing investment returns, and reduces the funds’ risk from potentially stranded assets.”
The Governor also repeated his call that owning ExxonMobil stock is not a business Vermont should be in because of the misleading tactics the company used to conceal their knowledge of climate change. Both the Los Angeles Times and Inside Climate News have documented these misleading tactics, and the California Attorney General and New York Attorney General are currently investigating ExxonMobil’s actions.
If Vermont uses divestment as a tool to combat global warming, the state will join California and more than 500 entities with over $3.4 trillion in assets that have committed to divesting.