By Mike Tobin
Angela Rodell, the CEO of the Alaska Permanent Fund was fired last Thursday afternoon. Since it is generally agreed that she was an experienced professional, respected among her peers, who increased the value of the fund by $30 billion during her tenure, the firing by a 5-1 trustee vote came as a surprise.
Some legislators and journalists have asked if Rodell’s firing could be political. The answer is yes. All five votes for firing her came from Gov. Mike Dunleavy’s appointees, several with close political ties to him. Rodell has publicly opposed Dunleavy’s proposals to pull $3 billion out of the fund above the percent of value formula.
But in fact, it appears that some of the fund’s decisions have been political for some time. Let me explain and expand the discussion to include the pension funds managed by the Alaska Retirement Management Board. For years members of 350Juneau and others have testified at Alaska Permanent Fund Corporation and ARMB board meetings, advocating that the funds divest from fossil fuel companies because they were bad investments. During that time, climate science was clear in warning of the peril of burning coal, oil, and methane gas for energy. Climate catastrophes mounted yearly. International banks, investment houses and other investment professionals began to define the risks of holding fossil fuel investments and of not divesting them. We were told “The fund (in this case the Permanent Fund) invests in companies, not causes.” OK, then. What companies?
A new report from The Climate Safe Pension Network sheds light on what companies. It is called “The Quiet Culprit: Pension Funds Bankroll the Climate Crisis”. The report analyzed the holdings of 13 public pension funds and the Permanent Fund. These include pension funds in California, Washington, New York, and others that together held $81.6 billion in fossil fuel investments. As of June 30, 2021, the APFC owned about $5 billion in fossil fuel investments, and the ARMB about $1.3 billion. The details of the report are available at www.climatesafepensions.org.
Among its fossil fuel investments, APFC had an $862 million exposure to thermal coal including $717 million in Peabody Coal. The ARMB had a $457 million exposure to Peabody. Peabody has been an important actor in climate change denial and has contributed to two dozen climate change denial organizations.
The Funds together have investments of about $250 million in Canadian tar sands. Tar sands oil is the dirtiest oil on Earth and producing it destroys the boreal forest lands of Alberta on a scale comparable to mountaintop removal mining in Appalachia.
In addition, our two funds own Exxon, Chevron, Conoco Phillips and Shell. These companies’ business plan is to produce as much fossil fuel as possible for as long as possible in spite of the climate consequences.
In a time of increasing climate instability, how is owning investments in coal or tar sands oil not political? How is owning stock in Exxon (spreading climate disinformation since the 1970s),
Chevron, or Conoco Phillips not political when they actively engage in promoting climate change disinformation and lobbying to maintain their government subsidies and opposing renewable energy development?
The fossil fuel sector of the financial markets has been contracting for years. Of the 10 sectors on the S and P 500 index, the value of this sector has fallen from 28% of the total to 3% since 1980. In this financial environment is it safe to divest from fossil fuels?
Yes. BlackRock, the largest financial asset manager in the world, examined hundreds of portfolios worldwide in a study commissioned by New York City’s pension fund. BlackRock found no net negative financial impacts to funds that have started to divest. Their forward projections for fossil fuel company investments showed that they hold significant regulatory, technological and market risks.
We believe our funds would have had better earnings if they did not maintain failing investments in fossil fuels, and that acquiring and maintaining these investments was done in part for political reasons in violation of legal fiduciary responsibility. We believe that these holdings reflect the political power of the fossil fuel industry in a producer state like Alaska.
Our funds should make an immediate public commitment to fully divest from fossil fuels, move immediately to invest 5% of their assets in climate solutions, and to push assets in their portfolios to halve emissions by 2030 consistent with the science of limiting global warming to 1.5 degrees Celsius.
• Mike Tobin is a member of 350Juneau, Climate Action For Alaska. Columns, My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire. Have something to say? Here’s how to submit a My Turn or letter.
