DC Council Introduces the Fossil Fuel Divestment Act
For Immediate Release.
DC Poised to Become 33rd US City to Divest From Fossil Fuel Companies
Majority of Council backs legislation to close dramatic gap between DC’s sustainability goals and investments in oil, gas, and coal companies
WASHINGTON, DC — Today, a majority of the DC Council introduced legislation backed by a coalition of public health, community, and environmental organizations that would remove investments in fossil fuel companies from the District’s portfolios.
Councilmember David Grosso announced the introduction of the Fossil Fuel Divestment Act of 2015, joined in co-introduction by Councilmembers Charles Allen, Mary Cheh, LaRuby May, Brianne Nadeau, and Elissa Silverman. Also, Councilmember Anita Bonds opted to co-sponsor the bill.
“When it comes to sustainability and renewable energy, it is important that the District of Columbia leads with integrity,” said Councilmember David Grosso. “The District of Columbia’s government has a moral and financial imperative to divest our funds from fossil fuels. On one hand, we are working hard to address climate change, while on the other hand we are contributing to the problem. It is the responsibility of our government to take real action to fight climate change by investing in environmentally sustainable funds.”
The bill directs the DC Retirement Board and the District’s Chief Financial Officer to remove all direct investments in the 200 publicly traded companies with the greatest reserves of coal, oil and gas from the DC Retirement Funds and the Health Annuity Trust within the next three years. Currently, the public funds hold $1.5 million worth of such direct investments, out of a total value of $7.6 billion (0.02 percent).
Globally, 460 institutions have committed to removing fossil fuel investments from a combined $2.6 trillion in assets. Institutions committed to divestment include CalPERS and CalSTRS – the nation’s largest public pension funds – the Rockefeller Brothers Fund, and more than 40 cities. Locally, Georgetown University in June became the first area university to divest, joining the DC-based Wallace Global Fund, a key leader in the philanthropic Divest-Invest movement.
In DC, 16 organizations have endorsed the legislation, including the DC Sierra Club, U.S. Public Interest Research Group, 350 DC, Chesapeake Climate Action Network, DC Divest, DC Environmental Network, and Mom’s Clean Air Force.
“Divesting the District from fossil fuels would send a powerful message to the world that it’s time to move beyond these polluting, climate-disruptive fuels and toward a just future based on clean, renewable energy,” said Maria Martinez of advocacy group DC Divest.
Mounting evidence from top financial analysts shows that fossil fuel stocks are increasingly risky. Private and state-run fossil fuel companies hold five times more fossil fuels in their reserves than can be burned if the world is to avert dangerous levels of climate change. As governments act to cut greenhouse gas emissions and limit the burning of fossil fuels, these reserves could become “stranded assets,” causing the companies that hold them to lose a major portion of their current value and costing investors and pensioners billions.
In December 2014, the Council passed a non-binding resolution that urged the DC Retirement Board to investigate divestment, but crucially lacked a mandate for action. The DC Retirement Board has remained invested in fossil fuel companies.
DC has a long history with divestment. The District’s funds are currently divested from companies with substantial business with the governments of Sudan and Iran following legislation enacted in 2009. Previously, DC divested in 1983 from companies doing business in apartheid South Africa, part of a divestment movement widely credited with speeding the downfall of apartheid.