Legislature Holds Hearing on Divestment, as Exxon Faces AG Healey’s Suit
Alleged deceptive practices and losses give fossil fuel divestment new urgency
FOR IMMEDIATE RELEASE
Contact: Colby Cunningham – 617-417-1100; email@example.com
BOSTON – The Joint Committee on Public Service has scheduled a hearing on fossil fuel divestment bills, for Monday November 18th. The hearing follows charges filed by MA Attorney General Maura Healey against Exxon Mobil for misleading Massachusetts investors about the climate-driven risks posed by its fossil fuel products. Among the bills being heard is H.3662/S.636, which would allow independent retirement systems to divest from the fossil fuel industry. The bill is championed by MassDivest, which published a white paper this month on the financial impact of fossil fuel investments on the Somerville Retirement System.
“The local option bill is important because, had Somerville been allowed to remain divested, it could have achieved a 5% greater return on its funds relative to an S&P 500 portfolio. Instead, PERAC reversed Somerville’s decision to divest in 2017, and told Somerville that it had to get permission from the legislature,” said study author Jamie Hall, of MassDivest.
The study compared the difference in returns of a standard S&P 500 fund and a custom S&P 500 fund that excluded many fossil fuel securities. The Somerville Retirement Board had briefly invested in the ex-fossil fuel fund before being required to return to the standard fund by PERAC in 2017. MassDivest’s analysis reveals that Somerville’s retirement system would have performed significantly better had it remained in the ex-fossil fuel fund.
“We want to make sure our retirement system is properly funded and that our retirees get the benefits they worked for, and that doesn’t have to come at the cost of our values,” said Somerville Mayor Joe Curtatone, who originally called for the Somerville retirement system to divest in 2014, and who will testify at the hearing.
Joining Mayor Curtatone to support H.3662/S.636 at the hearing are Peter MacKinnon, President of SEIU 509; Tom Sanzillo, of the Energy Economics and Financial Analysis and former Comptroller of New York; Newton City Councilor Emily Norton; Cambridge City Councilor Quinton Zondervan; and Elizabeth Levy of Trillium investments, among many others.
The AG’s 10/29/19 press release states not only that “…Exxon has hidden from investors its own knowledge of the systemic financial risk of climate change to the global economy and to Exxon’s fossil fuel business,” but also that “the company has illegally misrepresented to its investors that it has factored in to its financial planning and investment decisions the cost of complying with carbon regulations, the so-called ‘proxy cost of carbon,’ when internal documents show that it has not done so.” The release concludes that these deceptions inflated the value of Exxon’s holdings.
“The AG’s suit sheds light upon the financial risks that the climate crisis poses to fossil fuel companies — risks that Exxon knew to be evident since 1982. Independent retirement systems should have the option to reconsider the prudence of remaining invested in an industry known to the AG to have misled investors for decades,” Hall said.
The members of MassDivest and their supporters will make this case at the upcoming Public Service hearing, currently scheduled for Monday, November 18th.
MassDivest is a coalition working to divest pension funds in Massachusetts from fossil fuels. They have partnered with Rep. Dylan Fernandes and Rep. Jay Livingstone on H.3662. MassDivest also works with Senator Marc Pacheco, who has introduced S.636, a similar bill in the Senate.