Fossil Fuel Divestment Advances on Beacon Hill
H.3662/S.636 Voted Favorably Out of Joint Committee on Public Service
BOSTON – The fossil fuel movement in Massachusetts took a huge step forward this month, as the Joint Committee on Public Service reported the local option fossil fuel divestment bill H.3662/S.636 out of committee with a favorable recommendation. The bill would allow independent retirement systems throughout Massachusetts to divest funds under their control from the fossil fuel industry. These systems are not permitted to divest from any sector without a legislative mandate.
Money spent by the Legislature to combat the climate crisis was at the forefront of the debate around the bill at its hearing in November.
“Over the past two terms that I’ve been here, we’ve spent billions of dollars in the Legislature in bond bills to go to the effects of climate change and global warming,” Rep. Dylan Fernandes, of Falmouth, said in his testimony. “So why are we passing all of this legislation to combat the effects of climate change that cost our taxpayers billions of dollars while we continue to mandate that our public retirement systems spend our public dollars investing in the fossil fuels that are destroying our planet and causing us to do all these massive financially burdensome pieces of legislation that our tax dollars are paying for?”
Fernandes filed the legislation in the House and cited the billion-dollar Greenworks Bill passed earlier in the session as an example of the costs to Massachusetts taxpayers.
“I think what surprised me the most … is I thought this would take care of itself,“ said Rep. Jay Livingstone, of Boston, who co-filed the bill. “As these investments in fossil fuel companies underperformed the market, (I thought) our pensions would divest themselves, that that would be the financially prudent decision. But as you heard from the mayor of Somerville, Somerville did that analysis and they still weren’t able to divest.”
Somerville’s retirement board divested a fund worth approximately $9.5 million in 2017, but was shortly thereafter required to unwind that divestment by the Public Employee Retirement Administration Commission, which stated that divestment from any sector without legislative approval would be a breach of the board’s fiduciary duty.
MassDivest championed the local option bill, garnering support from over 80 legislators, as successor legislation to a home rule petition submitted in the previous session that applied only to Somerville, but which was referred to study.
“We appreciate the consideration and dialogue with the leadership on the Committee, particularly House Chairman Jerald Parisella and Senate Chairman Barry Finegold,” said Randi Mail, political director for MassDivest.
Several senators spoke favorably about the bill during a Senate session held days before the Public Service Committee vote.
“It is outrageous that we are not moving quickly on these types of issues,” said Sen. Marc Pacheco, who filed the Senate version of the legislation.
Pacheco went on to highlight the risk to pensioners posed by continued investment in the fossil fuel industry, which was illustrated by a study from MassDivest that showed that Somerville pensioners have suffered a 5% opportunity cost due to the reversal of Somerville’s divestment effort.
Pacheco concluded: “Let us not be the last entity that gets left holding the bag of debt and risk.”