Vosburg: Shareholder engagement is futile
Jane Vosburg launches the Fossil Free California campaign, urging CalSTRS to divest instead of pursuing shareholder engagement.
On Global Divestment Day, the second campaign-launch speaker in Sacramento was Jane Vosburg, a retired teacher and fervent activist for fossil fuel divestment. She is divestment coordinator for 350 Sonoma County and for the CalSTRS campaign of Fossil Free California. Her speech:
“Action on climate change must happen now!” CalSTRS knows this. And CalPERS knows it. They also know that we must transition to a low-carbon economy; that’s why they plan to increase their clean energy and technology investments. Finally, both CalSTRS and CalPERS know that to prevent climate catastrophe, fossil fuel companies must keep 80% of their current reserves in the ground. However, despite all this knowledge, they still refuse to divest from fossil fuels.
Instead of divesting, both pension funds are entrenched in the belief that shareholder engagement will be effective in convincing the fossil fuel companies to do right. This after ExxonMobil’s CEO Rex Tillerson reassured its shareholders that it intends to burn all its current reserves; it also spends $100 million a day exploring and developing more dirty fuel. For us this means that our pension funds support this exploitation of fossil fuel, and they support fracking which impacts the health of local communities in California.
Al Gore, in his recent presentation to the CalSTRS investment committee, said that engagement with fossil fuel companies does not work. They might show a willingness on their part to comply, but this is just a pretense, a smokescreen. Shareholder engagement legitimizes talk over real action.
Relying on engagement not only fails to acknowledge the urgency of the climate problem, but it also emboldens the fossil fuel industry to postpone its critical transition to renewable energy. Former commissioner of the SEC Bevis Longstreth suggests that the call for engagement might well be a ploy encouraged by the fossil fuel industry. He states, “In truth, if the engagement crowd didn’t exist, the fossil fuel giants would by now have invented them. (And, in light of the parallels to tobacco and lead, who knows the extent to which they did.)”
To help prevent climate and economic catastrophe, we call on CalSTRS and CalPERS to activate their divestment policy.
These fossil fuel investments already meet the three CalSTRS criteria for exclusion:
- They violate one of the ESG Risk Factors—the Environmental Factor.
- A potential for material loss of revenue exists.
- They weaken the trust of a significant portion of members to the System.
I ask you, members of the CalSTRS system, do you trust CalSTRS’ continued investments in the fossil fuel industry? NO!
Do you believe that shareholder engagement will be effective in influencing the fossil fuel industry to cut its carbon emissions? NO!
Do you want our pension funds to undermine the future of our children and grandchildren and all the students that we teach and have taught? NO!
According to Bob Massey, former executive director of Ceres, it is CalSTRS’ fiduciary duty to divest. He warns “that the failure to address a fundamental … destructive force … to … the future of an investment policy is, in fact, a breach of fiduciary duty.”
CalSTRS—and CalPERS—hear us! We call on you to follow your divestment policy. It’s time to move away from shareholder engagement and exclude fossil fuels from our retirement fund.