Minnesota's State Board of Investment Members to Support Divestment

Minnesota's State Board of Investment Members to Support Divestment

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Minnesota Youth Climate Strike started this petition to Governor Tim Walz and

New York City is one of the only cities to have taken the initiative to divest from fossil fuels. We, the state of Minnesota, needs to divest from a nefarious industry that is only perpetuating the climate crisis. As of right now, the State Board of Investments, having more than 90 billion dollars, is investing approximately 2.1-4.7 billion dollars (directly and indirectly) into the fossil fuel industry. Thus, we demand the State Auditor, Julie Blaha; the State Governor, Tim Walz; the State Attorney, Keith Ellison; and the State Secretary, Steve Simon - who are all members of the State Board of Investments - to use their single, and equal, vote to divest from fossil fuels for the sake of our future


There are a multitude of climate organizations within Minnesota that have made it their duty to bring awareness about divestment as well as urging the four members of the State Board of Investments to support divestment.


There are both economic and moral reasons for why we ought to divest from a hazardous industry:

  • Existing fossil fuel economies are no longer safe long term investments.
  • Renewable energy and green technology are becoming more economically viable. 
  • Climate change costs our economy 133.6 billion work hours due to illness. 
  • Scientific consensus verifies that greenhouse gas emissions are directly causing the climate crisis, which poses an existential threat to all human life on earth. 
  • The climate crisis has already caused millions of deaths, and mortality rates will increase as carbon emissions escalate.
  • As climate change intensifies, the United States faces increased food insecurity. 
     

Minnesota has pledged to transition to a green economy, and divesting from fossil fuels is a crucial step.  As the Guardian emphasized, “The green economy generates $1.3 trillion in annual sales revenue in the United States, while creating 9.5 million full-time jobs.” Furthermore, two-thirds of Americans prioritize renewable energy over fossil fuels. The time is over for fossil-fuel industries. In the long run, within the next ten years, investing in fossil fuels will not economically sound. It’s immoral for an industry to wreak havoc upon the environment while obtaining support and investments from the state of Minnesota. 


Notably, investing in fossil fuels is a financial risk for Minnesota. As many studies have stated over and over again, the fossil fuel industry has become a volatile industry with revenues declining at an exponential rate. Presently, the sector has many financial woes that have prohibited economic growth. For instance, the collapse of oil prices in 2014 triggered a permanent downfall; experts do not foresee a future in which the price of oil barrels will reach $100 per barrel as they once did during the industry’s thriving times. It is important to recognize the current status of the industry. A Bloomberg article states, “The sector makes up just 4.4% of the S&P 500 Index compared with 11.7% a decade ago.” Furthermore, in the 1980’s, energy companies held seven of the top ten spots. In 2018, they only held one of the top ten spots. Despite the fact that Exxon was  in 7th place, their revenue has decreased. IEEFA emphasized, “The company had revenues of $466 billion in 2008 and approximately half that in 2017, at $237 billion. It paid out $43 billion to shareholders in 2008, but only $13.7 billion in 2017.” Currently in 2019, no fossil fuel company is in the top ten; in fact, Exxon fell to 12th place (for the first time since 1925). The economic downfall of the top fossil fuel companies exemplifies the financial risk. 


If Minnesota continues to invest in fossil fuels, we can anticipate New York State’s current financial position to arise here. Corporate Knights analyzed, “New York State pension fund would be $22 billion richer had it divested from fossil fuel stocks 10 years ago. That works out to almost $20,000 for of each of the pension fund’s 1.1 million members and retirees.” The stubbornness towards divesting from fossil fuels led to 22 billion dollars in losses. Minnesota ought to not follow in the steps of New York State, but follow in the steps of New York City. The harsh reality is that we don’t have time to wait; we have to act now to prevent anymore losses. 

 

We believe it’s time for Minnesota to divest. The process of divesting from fossil fuels will not be an easy one; consequently, we urge the State Board of Investments to follow these proposals from Minnesota’s Divestment Strategy Coalition:  

1. Put in place a moratorium on new investments in the Carbon Underground 200 companies. (Carbon Underground 200)

2. Direct the Executive Director of the State Board of Investment to conduct a literature review and investment assessment of divesting from the Carbon Underground 200 companies and report back to the Board within six months of the Board’s direction. This study should: 

Assess the financial risk of: 

  • Catastrophic climate change
  • Stranded fossil fuel industry assets
  • Necessary government regulation intended to mitigate climate change
  • Litigation against the Carbon Underground 200 companies for climate-change related losses 

Be informed by the experience of other jurisdictions and entities that have divested or are in the process of divesting from the Carbon Underground 200 companies (e.g. New York City and the Rockefeller Foundation) 

Compare the returns on Carbon Underground 200 divested portfolios with traditional investment portfolios. 

3. Return to the State Board of Investment at its first meeting following the report with three scenarios, including expected rates of return, risk factors, and potential externalities for: 

  • Immediate divestment from the Carbon Underground 200 companies 
  • Gradual divestment from the Carbon Underground 200 companies over five years
  • Business as usual

SOURCES USED:

Institute for Energy Economics and Financial Analysis 

Bloomberg 

CNBC 

Go Fossil Free/Corporate Knights

0 have signed. Let’s get to 2,500!
At 2,500 signatures, this petition is more likely to get picked up by local news!