While Brown decided against divesting about $1 million (or 1 percent of its endowment) from 15 coal companies Sunday, Providence is considering moving more than $10 million of its $283,294 million pension nest egg from 39 fossil fuel companies to more socially responsible funds. What those new funds might be has yet to be determined.
Wainwright Investment Counsel produced this list for the city in August:
Equities
BP ………………………..$1,180,601
Chevron Corp ………..$692,395
Conocophillips ………$479,964
Energen Corp ………..$131,459
Eni Spa …………………$835,907
EQT ……………………..$191,165
Exxon Mobil …………..$646,875
Gdf Suez ………………..$1,244,539
Lukoil ……………………$612,200
Marathon Oil ………….$298,152
Marathon Oil Corp ….$154,712
Marathon Petroleum .$102,295
Mitsubishi ………………$544,447
Noble Energy ………….$143,102
Occidental Petroleum.$59,664
Questar Corp …………..$52,492
Sm Energy ………………$151,550
Southwestern Energy .$196,665
Swift Energy ……………$71,790
Total SA ………………….$1,253,430
Total equities ……..$9.043,403
Fixed income
Alcoa ………………………..$108,665
Anadarko ………………….$118,718
Arcelormittal …………….$18,113
Chesapeake ………………$152,600
Continental ………………$58,350
Encana Corp …………….$123,921
Newfield Exploration ..$108,150
Occidental Petroleum ..$240,890
Peabody Energy ………..$76,688
Petrobras ………………….$189,128
Questar Corp …………….$145,636
Rio Tinto ………………….$129,038
Rio Tinto ………………….$88,621
Sm Energy ………………..$15,900
Statoil Asa ………………..$160,545
Teck Resources …………$5,100
Teck Resources …………$117,627
Total ………………………..$1,857,689
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Of course we should! That such a question can even be debated speaks volumes about what our values are: making money. Though, as my TV arch nemesis Justin Katz points out, it would be a great follow up if that gun stock turns out to be a real dog!
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“The City Council has a moral responsibility to ensure that no public money is being used in the manufacture of weapons that are endangering public safety,” said the resolution passed by the Council. “Now, therefore, be it resolved, that the Providence City Councîl does hereby urge the Providence Boaïd of Investment Commissioners to continue its review of the pension investments to determine whether or not its portfolio includes equity firms that have holdings in companies that manufaeîure assauìî weapons and divest from any such firms.”
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I’d also encourage Raimondo and the others who control Rhode Island’s $7 billion nest egg to look hard for other opportunities to be more socially responsible with our money. This would be a pension reform progressives would be proud to support, and would be better for our economy than cutting COLAs or enriching hedge fund managers.
Divestment, or socially responsible investing, is already a movement in Rhode Island. The Providence City Council recently voted to make its investment portfolio better match its values (what that will look like still remains to be seen) and Brown Divest Coal has long advocated for the Ivy League endowment to take its money out of companies that harm the environment.
Here’s hoping Seth Magaziner’s political ambitions will help shine a bright light on why socially responsible investing is a better bet for Main Street. High finance can be community-minded. And the more it is, the more profitable being community-minded will become.
]]>“It was the best of investment strategies. It was the worst of investment strategies.”
Thankfully, there may be a third way that could take the best of both while skimming away the parts nobody likes.
J. Michael Downey makes the point that General Treasurer Gina Raimondo’s big bet on hedge funds serves as a wealth transfer from local retirees to Wall Street investors. “Instead of promoting retirement security for all Rhode Islanders, the changes have apparently enriched wealthy hedge fund managers,” he told Fitzpatrick.
Meanwhile, J. Michael Costello, “one of the longest-serving members of the State Investment Commission and managing partner of Endurance Wealth Management,” according to the ProJo, defended hedge funds saying, “we have a very underfunded pension system that has to pay hundreds of millions of dollars in excess of what comes in every year. As a result, you need to be careful with the various market fluctuations, so the motivation is to use these types of funds that traditionally hedge against significant downside events.”
If only there were a way to protect against downside events without transferring wealth to otherwise disinterested economic actors … Oh wait, there is!
Rhode Island should consider divesting from both index and hedge funds and invest instead in local and/or sustainable funds. There is certainly a way to structure a fund that hedges against the S&P 500 while boosting the (not-yet-indexed?) Ocean State 250.
It’s also well worth noting on this blog that Raimondo has defended the investment and denounced the fees – and I hope to get to compliment her efforts one day at transferring the wealth back from Wall Street to Main Street.
]]>“The conversation was fascinating, but this conversation isn’t new to campus,” said student Rachel Bishop in an email. “Brown Divest Coal has engaged in discussions with the administration and students for a year now. In fact, Brown has an entire committee charged with considering the ethics of Brown’s investments, and they endorsed Brown’s divestment back in April. I hope the Board of Trustees listens to the message coming out of these conversations and vote yes to divestment.”
Here’s the entire video of the debate:
]]>In 1776, Rhode Island was the first colony to declare its independence from the British. In 2013, it is time for Rhode Island to become the first state to declare its independence from fossil fuels.
Fossil Free Rhode Island (FFRI), a growing group made up of community members and alumni, faculty and students from Rhode Island’s colleges is calling on the State of Rhode Island to divest from fossil fuels.
“Every day that goes by without action, means that more and more fossil fuels are being extracted and burned, leading to the wreckage of the climate and the poisoning of our communities,” explained Sherrie’Anne André. “Rhode Island has a moral obligation to act, and the time to act is now.”
FFRI has an ongoing campaign to convince the administrations of the University of Rhode Island, Rhode Island College and the Community College of Rhode Island to divest from the fossil fuel industry. FFRI, joining forces with the divestment movements at the Rhode Island School of Design and Brown University, recently celebrated the Providence City Council’s decision to commit to fossil fuel divestment. Now that the City of Providence has committed to divestment, the time is ripe for the State of Rhode Island to make history, once again, by divesting its multi-billion dollar pension fund from the fossil fuel industry.
The following are just a few examples of the surprisingly rapid growth of the fossil fuel divestment movement:
FFRI cites the following motivations for divestment:
Indeed, as the divestment movement gains traction, a growing number of politicians are voicing their support. Meanwhile, investors across the globe are contemplating the results of over-valuation of oil, coal and gas reserves held by fossil fuel companies and the uncertainty of their future.
With more coastline per square mile than any other state, Rhode Island suffers disproportionately from the worsening reality of climate change. Ocean acidification, sea level rise and extreme weather events have already taken a heavy toll on our communities. Citing this reality in its recently started petition drive FFRI declares: “We must act now to avoid catastrophe. […] We, the People of Rhode Island, urge our leaders to divest all state funds from fossil fuels to protect our future.”
]]>In a victory for the national movement urging colleges and cities to divest from fossil fuels, the Providence City Council voted this Thursday to divest from the fossil fuel industry. The resolution, introduced by Council President Michael Solomon and Council Majority Leader Seth Yurdin, commits the city to divesting its assets from the top 200 fossil fuel companies because of the industry’s contribution to the climate crisis.
“The Council has a moral obligation to ensure that no public money is being used to promote industries or practices that harm the health and well-being of the people of Providence,” said Yurdin. “Fossil fuels are a major contributor to rising amounts of carbon dioxide, and global warming is already approaching dangerous levels.”
With this resolution, Providence joins 15 other municipalities –including Seattle, San Francisco, and Madison– as well as 6 colleges that have already pledged to divest. Amongst the cities, Providence is the first state capital and the largest east coast city to divest.
Abel Collins, manager of the Rhode Island Chapter of the Sierra Club, celebrated the council’s decision. “Cities around the country will follow the leadership of Providence, the schools of the city too. In the process, more people will be educated about the danger posed by the fossil fuel industry, and perhaps even the political will to deal with the problem in Washington will at last be found. The City Council should be applauded for being on the right side of history.”
At the vote on Thursday, a group of Rhode Island climate activists rallied outside the council chambers in City Hall to show their support for divestment. The group, called Fossil Free Rhode Island (FFRI), is calling for divestment of the state, as well as all Rhode Island municipalities and public universities. To date, Fossil Free Rhode Island has collected over 400 petition signature in support of divestment, and has received the endorsement of a number of local business and nonprofits, including the South-East New England Program of the American Friends Service Committee (AFSC-SENE). FFRI is part of a national fossil fuel divestment campaign that has spread to over 300 colleges and 100 cities, states, and religious institutions over the last 9 months.
“The growth of the national Fossil Free movement has been incredibly quick, and the victory in Providence will inspire the divestment movement at Rhode Island’s colleges. Divesting from fossil fuels is crucial for institutions truly dedicated to providing their students with a sustainable future.” said Peter Nightingale, a professor at The University of Rhode Island and a member of Fossil Free Rhode Island.
(The material presented above is from a press release issued by Fossil Free Rhode Island yesterday. For the resolution of the Providence City Council follow this link.)
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