By HENRY GARRIDO
Executive Director, District Council 37, AFSCME, AFL-CIO

NEW York City Mayor Bill de Blasio, Comptroller Scott M. Stringer and other trustees of the city’s pension funds recently announced a new goal to double the funds’ investments in climate change solutions to $4 billion, or 2 percent of the city’s $195 billion pension portfolio, over the next three years. This plan builds upon an earlier announcement to divest city pension funds from fossil fuels within five years.

Opponents have engaged in scare tactics. In recent months, the Daily News has published two hyperbolic op-ed pieces criticizing these moves and falsely assailing the motives behind them. On the internet, opponents exploit the anxieties of pensioners and urge them to sign a petition, essentially just saying no to the future.

Safeguarding our retirement

As a trustee of the New York City Employees Retirement System (NYCERS), I work with all other trustees to exercise great care in the discharge of our fiduciary duties. All trustees regard the safeguarding of investment assets as their greatest and most important duty.

Trustees devote considerable time, study, and thoughtful discussion evaluating the types of investments included in the funds; asset allocation; timing of asset sales and purchases, and other parameters — all with the goal of maximizing returns at an acceptable level of risk.

NYCERS itself has been in existence for nearly a century and has a very long- term investment horizon which enables the system to withstand periodic market downturns and, over time, make good on investment losses.

It is important to note that the fund suffered enormous, unprecedented losses during the Great Recession of 2008-2009 due to Wall Street fraud, massive incompetence by money managers, and sky-high management fees. No one on Wall Street was ever held responsible for these losses but not a single pension payment was missed and the system has grown to a record high of $66 billion. The system continues to grow its assets and all municipal employees enjoy constitutionally protected pension benefits.

Pivoting from fossil fuel investments to renewable energy and newer technologies is essential for the long term health of our economy, for the stability of the pension system, and for the pension security of beneficiaries.

We must embrace sustainable investments such as clean technology and renewable energy — and guess what? Wealthy investors all over the world already know this.
In a recent article in the Financial Times, Mark Haefele, the chief financial officer of UBS Global Wealth Management, points to a UBS survey of wealthy investors that finds “39 percent say they already have sustainable investments in their portfolios… A great deal of evidence supports the conclusion that sustainable… investors can at least match the returns of ordinary investors.”

Moving to clean energy isn’t a pipe dream. It is a sound investment strategy.

NYCERS’ exit from fossil fuels, which will happen prudently and over time, will help catalyze economic transformation, encourage other systems and cities to follow us and provide momentum for sustainable economic growth. By acting now, NYCERS is exercising its fiduciary duty. It is the failure to act that would be irresponsible.

The mayor and the comptroller are to be commended for embracing the future and moving away from regressive and increasingly risky investments. Their opponents should not exploit the fears of pensioners who experienced the financial collapse of 2008-09. Let us not forget the Great Recession was caused by Wall Street’s reckless and criminal behavior. Exploitation of such fears is also reckless.

We ask you to sign a petition to support this vital cause. Please take the opportunity to have your voice heard.

The DC 37 Blog is an online publication of District Council 37, AFSCME, which represents 125,000 municipal employees in New York City. This article originally appeared in the October 2018 issue of Public Employee Press.