Five years after pledging not to invest city funds in fossil fuel industries, the Minneapolis City Council has joined a campaign to rid state pension funds of holdings related to the largescale production of greenhouse gases.
On Aug. 14, the council approved a resolution urging the State Board of Investment (SBI) — an entity comprised of the governor, attorney general, state auditor and secretary of state — to begin divestment this year.
Council members and aides say divestment is in the best financial interest of current and former city workers and other public employees, noting research indicating that fossil fuel stocks have underperformed compared with the market in recent years.
They also have argued that divestment could slow fossil fuel burning by making it more difficult for companies to access the funds they need to extract oil, gas and coal.
“For the good of everybody on earth, those firms have to get less profitable,” said Robin Garwood, a policy aide to Council Member Cam Gordon (Ward 2), who co-authored the resolution.
Fossil fuel divestment campaigns have been a key tactic of environmental activists in recent years, particularly at liberal arts colleges and universities, where endowments have been at the center of debate.
Supporters argue that divestment is financially prudent because humans will be forced to use less oil, gas and coal in coming years to avoid the most catastrophic impacts of climate change.
They also have argued that divestment campaigns have raised awareness about climate change and that the negative attention fossil fuel companies receive could lead them to invest more in alternative energy.
Opponents say that ridding portfolios of fossil fuel stocks won’t put financial pressure on the companies, because there are other investors willing to buy them. They also say that there are better ways to drive down fossil fuel consumption, such as carbon dioxide regulations and taxes and investments in clean energy sources.
“People who have committed themselves to divestment campaigns can make major contributions through channeling their commitments into fighting on behalf of such a policy framework,” University of Massachusetts Amherst researchers wrote in an April 2018 working paper.
In Minnesota, a coalition of businesses, nonprofits and environmental and political groups have been calling on the SBI to divest fossil fuel-related holdings from its $102.4 billion pension fund. (Th e exact amount invested in fossil fuels is unknown, according to the nonprofit MN350, though one volunteer estimated that the total is at least $1.6 billion.)
While the board has made no promises on the issue, activists have said they were pleased with its decision in May to divest from coal-related holdings.
The Minneapolis City Council pledged in 2015 to no longer invest in fossil fuel-related industries, though it had no such holdings at the time. Garwood said the Aug. 14 resolution was off ered in solidarity with activists who planned to speak in favor of divestment at the SBI’s Aug. 26 meeting.
The resolution came two months after Attorney General Keith Ellison filed lawsuits against ExxonMobil Corp., among other fossil fuel companies, alleging it misled the public on climate change. The company has denied the allegations.
The St. Paul City Council has also passed a divestment resolution.