As three of New York City’s five pension funds move to divest from fossil fuels, one state government in the neighborhood is bucking the trend to move away from corporations operating in the carbon-based fuel industry. Governor Phil Murphy of New Jersey has warned against the impulse to sever ties completely with industries or companies when one does not agree with their practices. A spokesman for New Jersey’s investment division laid out the state’s reasoning for staying in the game. Divestment means forfeiting shareholder voice, the New Jersey official said, meaning that they would no longer be able to move the company in a direction more in line with their views. Murphy, a former senior director at Goldman Sachs, understands how the market and corporations actually work, and therefore the negligible impact of divestment.
Further showing the ignorance of the divestment movement, it is major energy companies that have made important breakthroughs in clean energy science since the beginning. Given the kind of change climate activists are seeking, they should be doing everything they can to have a say when Exxon and BP are deciding where to put their money. Nature Conservancy, the nation’s largest environmental nonprofit, has been partnered with Royal Dutch Shell for over a decade.
In the face of criticism, Governor Murphy is taking the right steps to improve one of the country’s worst funded pension systems. His budget proposal includes more than $500 million in increased pension funding in addition to his support of returns-focused investing. Struggling funds cannot afford to play futile political games with average Americans’ financial security. Meanwhile, the three New York City funds are moving a combined $3 billion to appease activists. Mayor Bill de Blasio claims that this move shows that “New York City is taking action,” but really it is the opposite. Taking action means doing something to effect change. Mayor de Blasio is giving up his seat at the table and leaving retirees out to dry in the process.