STATE MOVE THREATENS SOMERVILLE’S PLAN TO DIVEST FROM FOSSIL FUEL INDUSTRY

SOMERVILLE – Somerville’s push to divest its retirement fund from the fossil fuel industry has been set back over a process concern raised by the state.

The Somerville Retirement Board (SRB) decided in June to move $9.2 million in assets, representing 4.5 percent of the system’s total funds, into a fossil fuel free index fund. The move is the first part of a four-part plan to move the retirement system’s assets out of funds that include the top 200 fossil fuel companies.

But the state of Massachusetts has thrown an obstacle in the board’s path. The compliance office of the state Public Employee Retirement Administration Commission told the board that it should have issued a request for proposals (RFP) before moving the assets. The SRB decided in its July meeting to put the $9.2 million back into the original (fossil fuel inclusive) fund and begin the RFP process at its August meeting.

“This is disappointing, but we’re glad that the board is still committed to divestment,” said Sean Donaghy, of Fossil Free Somerville. “Divesting from the fossil fuel industry makes sense for the planet and for the financial health of the retirement fund. The performance of fossil fuel companies has been erratic at best, and as the world turns away from fossil fuels, investing in those companies will increasingly be a bad bet.”

The SRB previously submitted a new Statement of Investment Objectives to PERAC that stated that it will consider investment funds that do not include fossil fuels, and that statement was accepted. Fossil Free Somerville hopes that PERAC’s advisory is not an attempt to undermine the SRB’s ability to make sensible investment decisions that take into account dangerous long-term trends.

“The SRB has shown that it’s committed to divestment and will do it the right way,” said Nate Gundy, of Fossil Free Somerville. “The Somerville community, mayor and Board of Aldermen have also shown strong support for divestment. We will continue to support the SRB’s efforts, and we urge PERAC to not stand in the way of Somerville and other communities as they make the smart decision to divest.”

Contact: Colby Cunningham – 617-417-1100 or colbybcunningham@gmail.com

IN HISTORIC FIRST, SOMERVILLE RETIREMENT BOARD BEGINS DIVESTMENT OF RETIREMENT FUND FROM FOSSIL FUELS

In a historic move, Somerville has become the first municipality in the state to divest its retirement system from the fossil fuel industry.

The Somerville Retirement Board has enacted a comprehensive fossil fuel divestment plan by moving $9.2 million in assets into a fossil fuel free index fund as of June 21. The board voted 4-0 at its May 25 meeting to adopt a subcommittee recommendation of a four-step plan to move its assets out of funds that include the top 200 fossil fuel companies, with today’s divestment representing the first of those four steps.

This vote is a critical victory in the fight against climate change and demonstrates not only a prudent abandonment of an industry about to be made obsolete by the parallel stresses of stranded assets and the booming renewable energy sector, but also the power of municipalities to challenge the institutional underpinnings of the fossil fuel economy.

“We’re so thankful to the SRB for taking this momentous action,” said Colby Cunningham of Fossil Free Somerville. “After a thorough and prudent investigation of the issue over the last 18 months, the board has realized that it is in the best interests of the pension system to phase out investment in an industry that is experiencing a historic period of volatility and subscribes to a business model that is incompatible with the long-term survival of the human race.”

The board’s vote transfers all assets held with fund manager Rhumbline Institutional Index Management into a fossil fuel security free S&P 500 index fund. This transfer of $9.2 million represents 4 percent of the pension system’s nearly $250 million portfolio. The SRB’s new plan calls for three additional initiatives, including discussions with its largest equity fund manager, Congress Assets, about future possible equity divestment, an RFP process for a fossil fuel free bond fund solution, and an exploration of energy efficiency and climate vulnerability in its real-estate holdings.

The move is believed to be the first of its kind taken by any municipality in Massachusetts, and only the third in the country.

“This is a huge success for the people of Somerville, and it provides a blueprint to divestment for the other 105 cities and towns across Massachusetts that manage their own pension systems,” Fossil Free Somerville member Shoshana Blank said. “Somerville has shown the way on this issue, and we look forward to working with people throughout Massachusetts as they move their own communities toward divestment.”

Fossil fuel companies are an increasingly bad bet for investors, with long-term global trends continuing to favor renewable energy over the dirty fuels of the past. Despite moves by the current U.S. presidential administration to abandon the country’s climate change commitments and shore up a coal industry in inevitable decline, the outlook is clear — the world is moving away from fossil fuels, and smart investors will get out before those securities crash completely.

 Contact: Eric Fields – 615-972-2188ericcfields@gmail.com

About Fossil Free Somerville

Fossil Free Somerville is a citizens advocacy group that has been working to encourage the Somerville Retirement Board to divest the city’s pension fund from the top 200 fossil fuel companies. It led a successful petition drive to convene a hearing of the Board of Aldermen to vote on a divestment initiative in March 2014. The board approved a nonbinding resolution in support of divestment in June 2014.

Facebook: https://www.facebook.com/DivestSomerville/info
Twitter: https://twitter.com/SomerFossilFree

Celebrate as Somerville Divests!

We’ve done it! We’ve achieved victory with our campaign to divest Somerville’s pension fund from fossil fuel companies. After four and a half years of hard work from our volunteer team at Fossil Free Somerville, we can now proudly say that we have won.

The Somerville Retirement Board voted to move a portion of its investments into an S&P 500 Fossil Free fund at its May 25th meeting. The move is expected to take place this month, representing the first real divestment by the city, and the board will work to divest the rest of its portfolio in the coming months.

There’s still more work to be done, but we want to celebrate this major achievement with everyone who made it possible. Come together to celebrate, meet friends new and old, and learn about our new campaigns. There will be food, drinks and joy!

When: Sunday, June 18 at 4 PM – 6 PM

Where: The Somerville Armory, 191 Highland Ave, Somerville, Massachusetts 02143

Facebook event link: https://www.facebook.com/events/2172253416334338

Join Our Holiday Party and Activist Meet Up December 6th

Come join the members of Fossil Free Somerville and Somerville Climate Action as we welcome the holiday season, celebrate the victories of the climate movement, and reflect on the work that needs to be done in an uncertain future. Climate activists and members of the Somerville community alike are welcome to join us at the cafe in the Somerville Armory for refreshments, socializing, and holiday cheer. We will be raising money for Stand with Standing Rock, and their efforts to defeat the Dakota Access Pipeline. Food will be provided by SCA, and liquid refreshments will be available from the Armory Cafe. Please, no outside food.

WHAT: Fossil Free Somerville and Somerville Climate Action Holiday Party
WHEN: Tuesday, December 6th, 7pm
WHERE: Cafe at The Armory, 191 Highland Ave, Somerville, Massachusetts 02143
RSVP and more details here. 

Want to get involved? New members meeting March 8 @ 7pm (2016)

Do you think you might be interested in getting involved in the campaign to divest Somerville from the fossil fuel industry? Come learn about our group, the divestment movement, the history of our campaign, and how you can help.

You don’t have to be ready to commit to anything to attend this meeting. Anyone interested in learning more is welcome!

Join us Tuesday, March 8th 2016 at 7pm at the American Friends Service Committee building (2161 Mass Ave, near Davis Square).

RSVP on Facebook, or just show up! Pizza will be served!

FFS Film Screening of This Changes Everything

Join Fossil Free Somerville, along with Somerville Climate Action and Rep. Denise Provost for a screening and discussion of the film “This Changes Everything,” a powerful look at how communities around the world are facing the challenge of climate change–and learn what you can do to empower your local community to take action.

Based on the book by Naomi Klein, she uses the film’s stories to connect the carbon in the air with the economic system that put it there, building up to her most controversial and exciting idea: that we can seize the existential crisis of climate change to transform our failed economic system into something radically better.

You will also get a preview of Somerville’s newly completed Green House Gas Inventory. This report is a snapshot of GHG emissions in Somerville in 2014. It is an important first step in planning for emissions reductions and the long-term goal of carbon neutrality by 2050.

Food and beverages available in the Armory Cafe.

RSVP here: https://www.facebook.com/events/1666219763651721/

Open Letter to the Somerville Retirement Board

To: Somerville Retirement Board

On Monday, the Boston Globe reported that the Massachusetts state pension fund has lost over $500 million as a result of its investments in the fossil fuel industry over just the last year, according to a review by Trillium Asset Management. This comes after a report by the same group last month showing that the California state pension system had lost $5 billion by investing in the fossil fuel industry during the last year.

“This is a material loss of money, which directly impacts the strength of the pension fund”, said Matthew Patsky, CEO of Trillium Asset Management. “Fossil fuel stocks are volatile investments. Investors and fiduciaries should take this moment to reassess their financial involvement in carbon pollution, climate disruption and the financial risk fossil fuels plays in their portfolio.”

These reports raise serious questions about how much money the City of Somerville has lost on its own pension investments. As members of the Somerville Retirement System and elected officials representing members of the System, we are concerned about the financial health of the Somerville pension fund.

According to the report’s authors, the state’s losses are due to the fact that the fossil fuel industry has underperformed the market for the last several years. Looking forward, the prospects for a long-term recovery for these stocks are not bright. As easily accessible fossil fuel deposits are exhausted, the cost of fossil fuel extraction continues to rise. At the same time, technological advances are lowering the costs of alternatives, such as solar and wind, which will undercut increasingly expensive fossil fuels. In addition to these structural factors in the energy sector, measures necessary to address global climate change will require dramatic reductions in the use of fossil fuels in the near future, with research showing that around 80% of all known fossil fuel deposits must be left in the ground.

Jeremy Grantham, the major investor famous for being one of the few people in the investment community to predict both the tech bubble and housing bubble, has said that “if all this doesn’t make these investments unprofitable, they will be very lucky”, and several reports from the London School of Economics have suggested that all the unburnable fossil fuels owned by fossil fuel companies represents a large market bubble.

These concerns have now been echoed by many financial experts with reports from rating agency Standard and Poor’s, investment banks HSBC and CITI, and investment firms Aperio Group, IMPAX Asset Management, and MSCI, all recommending divestment from fossil fuel stocks.

In Somerville, the Retirement Board has been charged with the task of considering divestment for the past year and a half, under pressure from the grassroots group Fossil Free Somerville. Action on divestment is already supported by the Mayor and every member of the Board of Alderman.

Beyond Somerville, a global fossil fuel divestment movement has been fueled by these serious financial concerns in addition to moral concern about investing in an industry that constitutes a serious threat to the planet and that spends enormous sums of money lobbying against policies needed to fight climate change and funding climate change denial. Many institutions and cities around the world have already committed to divesting some or all of their funds from fossil fuel stocks including Stanford University, Syracuse University, University of California, the cities of Oakland, CA and Seattle, WA, the state of California, and many others.

In Massachusetts, there is a bill in the state legislature (S1350 & H2269) to divest the state pension fund. Unions representing workers in the pension system, concerned about the financial health of fund their members rely on for a secure retirement, have joined environmental organizations in campaigning for divestment.

Fortunately, Somerville is one of a minority of cities in Massachusetts to control its own pension investments and therefore does not need to wait for this bill to pass in order to divest.

Despite all this, the Somerville pension fund currently maintains millions of dollars invested in fossil fuel companies. We have serious concerns about whether this is consistent with the Somerville Retirement Board’s fiduciary duty to Somerville’s workers and retirees.

We therefore request that the Somerville Retirement Board provide answers to the following questions for members of the pension system and all the residents of Somerville:

How much money has Somerville lost as a result of maintaining investments in the fossil fuel industry over the last year and past three years?

Given the ongoing structural changes in the energy sector and the pressing need to reduce fossil fuel usage in response to global climate change, does the Retirement Board think these stocks are likely to recover their value rather than continue to decline?

Can the Retirement Board re-invest the money currently invested in the fossil fuel industry to better ensure the long-term health of the Somerville pension fund?

Sincerely,

Katjana Ballantyne
Ward 7 Alderman

Mathew McLaughlin

Mark Niedergang
Ward 5 Alderman

Peter St. Clair
SRS Retiree

Patricia Wild
SRS Retiree

Fossil Free Somerville shows solidarity with Tufts Janitors

On Saturday, May 16, a few members of Fossil Free Somerville attended a rally and march protesting the janitorial cuts proposed by the Tufts administration. Prior to this action, several Tufts students went on a 5-day hunger strike to support the janitors’ struggle. The Somerville Board of Aldermen also passed a resolution opposing the cuts. For more information, see this article. If you want to sign a petition demanding justice for Tufts janitors, click here.