FOR IMMEDIATE RELEASE –
December 2, 2020
Contact: Jake Flynn, 213.473.7003, cell: 310.663.3770
CITY COUNCIL SUPPORTS BLUMENFIELD’S EFFORT TO DIVEST CITY PENSION FUNDS FROM FOSSIL FUELS AND SHIFT INVESTMENTS TOWARDS GREEN, PROGRESSIVE COMPANIES
LOS ANGELES,CA – Taking a bold step to reduce the City’s investments in fossil fuels, today the Los Angeles City Council voted unanimously to support Councilmember Bob Blumenfield’s legislation to craft a comprehensive framework to divest city pensions from companies perpetuating and expanding the effects of climate change.
“Since I introduced this measure one year ago, we have seen the hottest day on record in my district, a nearly endless barrage of wildfires, and destructive hurricanes throughout this country. We need to do so much more to help reverse climate change starting with putting our money where our mouth is,” said Blumenfield. “We can have profitable secure investments without embracing climate change enablers.”
Los Angeles City Employees' Retirement System (LACERS) is responsible for managing City pensioners’ retirement dollars, which as of June 2020 totals to $17.7 billion. LACERS has invested more than $100 million in oil companies, many of which have shown no interest in moving towards renewable energy. Consistent with its commitment to combating climate change, the City has a responsibility to divest LACERS pension holdings from fossil fuel companies that are unwilling to turn away from the production of oil. It is time for the leadership of Los Angeles to divest from oil companies that are actively contributing to the global problem of climate change and subjecting Los Angeles to unnecessary risk, both environmentally and financially.
Climate change is not only a global environmental threat- it also presents a significant financial risk to shareholders of the companies contributing to environmental catastrophes. From financial losses because of extreme weather to asset re-pricing as the global economy moves towards a low-carbon economy, investments in fossil fuel companies pose a climate-transition risk that may endanger the financial vitality of retirees’ investments.
Some major cities such as San Francisco have already initiated a coordinated effort to divest their pension funds from fossil fuel companies. On October 10, 2018 the board of the $25.5 billion San Francisco Employees Retirement System (SFERS) voted to divest its shares in seven fossil fuel companies because they posed the highest climate transition risk according the SFERS’ Climate Transition Risk Framework that is based on 1) Fossil Fuel Reserves, 2) Operational Emissions, 3) Climate Policy Approach, and 4) Financial Health.
Blumenfield’s motion specifically directs LACERS and city departments to craft:
Recommendations on the feasibility for the LACERS Board to adopt a similar Climate Transition Risk Framework to SFERS’ to identify investments in fossil fuel companies that pose an environmental and financial risk;
Options to create a climate-change watch list that will report the riskiest investments in fossil fuel companies and develop a strategy to engage with the respective companies to reduce their oil and gas reserves and increase their efforts to move towards renewables and address climate change;
A plan to divest from uncooperative fossil fuel companies and appropriately reinvest capital;
A watch list to identify other LACERS investments such as in tobacco and firearm companies that contradict the City Council’s official positions and goal to provide a healthy and secure future for Angelenos.
“Now that Los Angeles 'fire season' has become a year-round event, and coastal cities are faced with unprecedented storms, there truly is no time to waste, and no strategy we shouldn’t try, we must do everything we can as a City to turn back the tide of climate change,” concluded Blumenfield.