Vermont Gov. Peter Shumlin issued a Thursday press release congratulating the Vermont Legislature for joining him in calls for the state’s pension to divest ExxonMobil assets, while the chair of the retirement pension warns such calls might too costly.
The Vermont House joined Shumlin’s call for divestment in February, passing a resolution urging “the State of Vermont remove the stocks of companies with coal holdings and the stock of the Exxon Mobil Corporation from its pension investment portfolios.”
And now the Vermont Senate has chimed in with its two cents, writing a letter addressed to the Vermont Pension Investment Committee (VPIC) calling on the pension fund to comply with the House’s resolution requesting divestment from ExxonMobil and coal producers.
The letter also asks the VPIC to report to the Senate and House Committees on Government Operations by May on its progress.
Shumlin, for his part, wrote a letter to the VPIC Thursday, urging the pension to “include a VPIC member who remains open to divestment” so the group can maintain some objectivity when considering how best to divest its Exxon assets. The governor said he’s concerned about recent public comments from VPIC members objecting to divestment — Shumlin said the pension would not put its best foot forward on the divestment issue if its members are politically opposed to the idea.
The governor was not always a champion of purging fossil fuels.
“We believe that having a seat at the table — owning the stocks and having a seat at the table with the oil companies — is a good place to be,” Shumlin said in 2014 about he and Pearce’s then-opposition to divestment.
Some critics have called the governor’s newly found cause politically driven, while still others say the divestment issue is too complex an issue to be left up to legislatures to determine.
Rob Roper, the director of the Ethan Allen Institute, one of Vermont’s only free market think tanks, wrote an op-ed in February castigating the governor’s calls for divestment.
Using the state’s public pension as a pawn to solve so-called man-made global warming effectively allows state functionaries to politicize what is supposed to be a “non-political function of funding state pensions,” Roper wrote.
“It is kowtowing to a small, loud group of activists, well-funded by out-of-state sources and pushing an agenda that has nothing to do with state workers’ retirement benefits,” Roper noted.
Roper was referring to Shumlin’s move to call on the state’s pension fund to divest its coal assets during his state of the state speech in February.
Thomas Golonka, the chair of VPIC, told a reporter Thursday that the divestment is an extremely complex action for the Vermont retirement pension. It’s not as simple as cutting away unwanted assets.
In fact, Golonka said, if divestment ends up costing the pension lots of money, which is likely, then it will have to ask the state to foot some of the bill, adding that he doesn’t think the beneficiaries should have to pay for divesting fossil fuels.
“Divestment is a hot button issue, and it’s not coming from the pension beneficiaries — it’s coming from the governor’s office and from the environmental groups here in Vermont,” he said in an interview with Vermont Watchdog.org.
“I appreciate their opinion,” Golonka said about Shumlin and the state legislature, “but I just think we need to act as fiduciaries to understand what are the impacts to the trust itself and will it cost us significantly more than people think, and make a decision based on that.”
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