Mayor McGinn Calls On Seattle To Divest From Fossil Fuels
Seattle Mayor Mike McGinn wants the city to get its money out of fossil fuels. He has called on the city’s two main retirement funds to divest millions of dollars invested in oil and gas companies.
Climate change activists have been urging colleges and institutional investors nationwide to abandon the fossil fuel sector. McGinn is the first elected official to heed their call.
On Dec. 21, McGinn ordered the city’s finance director not to invest in any coal, oil or gas companies. As mayor, Mike McGinn has control over $1.4 billion of the city’s cash balances. None of those short-term balances are currently invested in fossil fuel stocks.
But the city’s two main retirement funds, worth another $2.6 billion, have major investments in the energy sector. McGinn doesn’t control the retirement funds. But he asked the boards that manage those funds to divest from fossil fuels and to offer city employees climate-friendly investment choices.
Burning of fossil fuels is the main driver of global warming.
The city hasn’t tallied its investments in the fossil fuel sector yet. But they include at least $17 million in ExxonMobil and Chevron stock, according to McGinn.
"We should make a statement by the use of our investments about the importance of not continuing to pump global warming pollution into the air,” McGinn said.
Tupper Hull with the Western States Petroleum Association (WSPA) says oil companies are in the forefront of developing climate-friendly energy sources. “Our association absolutely agrees that climate change is a major issue we need to address," Hull said. WSPA represents oil companies, including ExxonMobil and Chevron, in Washington and five other states.
“To think that we can convert an energy economy overnight, or in the short term, is not just not well-informed but frankly is dangerous," Hull said. "Dangerous to the economy, dangerous to a tremendous amount of jobs and economic activity.”
Continued growth in fossil fuel use has the world headed toward what climate scientists call “dangerous interference” with the Earth’s climate system.
As with almost any choice involving the stock market, it's hard to predict whether divesting from fossil fuel companies would hurt the bottom line of the city or its retirees. So far in 2012, ExxonMobil and Chevron stocks have underperformed both the Dow Jones Industrial Average and the S&P 500 by wide margins.
Mayor McGinn wants Seattle to gradually back away from its fossil fuel investments over the next five years. He said the city has a long tradition of leadership on climate change and that having a climate-friendly investment portfolio is a natural next step.