Maryland climate activists celebrate bill’s passage and urge legislators to finish the job in 2023
ANNAPOLIS– Today, Earth Day 2022, CCAN Action Fund and 350MoCo are celebrating the recent passage of HB740/SB566 as an important first step toward protecting state pension funds from the financial risks posed by the climate crisis. Both groups stressed, however, that to lead the state’s clean energy transition and to safeguard public health and retirees’ assets, Maryland must now do more by actually removing fossil fuel investments from the State Retirement and Pensions System (SRPS) portfolio.
Recognizing that climate risk is investment risk, Maryland House Bill 740 (SB 566) requires the SRPS to assess climate risk across certain industry sectors and asset classes in its investment portfolio and to identify opportunities for investment in emerging renewable energy technologies. The bill – which was sponsored by Delegate Brooke Lierman and Senator Sarah Elfreth and enacted without Governor Hogan’s signature on April 8, 2022 – encourages the SRPS to, over time, move away from fossil fuels and toward renewable energy investments.
“Thanks to Sen. Sarah Elfreth and Del. Brooke Lierman for their work putting this bill together and fighting for climate action. This legislation is another key step forward towards a carbon-free future,” said Mike Tidwell, Executive Director of the CCAN Action Fund, the advocacy arm of the Chesapeake Climate Action Network. “Now our state leaders need to finish the job in 2023 by requiring the state pension fund to fully divest its fossil-fuel holdings. When Maryland stops financing the polluters who are driving the climate crisis, we will have reduced the risk to our state retirees’ savings as well as the health and safety of all Marylanders.”
The climate crisis requires an urgent transition and some of Maryland’s legacy investments are simply too risky to continue. As of September 2021, Maryland’s SRPS held investments in 162 of the 200 largest publicly traded coal, oil, and gas companies in the world. These companies, including ExxonMobil and Chevron, are known as the Carbon Underground 200 (CU200). A recent report, published by researchers at FFI Solutions, found that Maryland’s SRPS sacrificed returns of over 15 percentage points since 2010 by continuing to invest in these companies. Specifically, for every $1,000 invested by the SRPS public equities portfolio in 2010, returns would be $150 greater today had the portfolio divested from CU200 companies. This report adds to a growing chorus of studies, including from the investment firm BlackRock, which show that portfolios that divest from fossil fuel assets match or outperform non-divested portfolios.
“Time is not, unfortunately, a renewable resource,” said Jeff Weisner, President of 350MoCo. “This bill, HB740, represents real progress but now Maryland must move ahead as soon as possible to divest from those polluter companies. With over 3,000 miles of tidal shoreline, our state is particularly vulnerable to the climate crisis. When the General Assembly reconvenes in 2023, Maryland must enact additional legislation that requires SRPS divestment from, and prohibits future investment in, all coal, oil, and gas companies.”
Other states and municipalities have already directed their public pension funds to divest from such companies. In the past year, two states, New York and Maine, have begun divestment. In Maine, this was accomplished by legislation. And in October 2021, the City of Baltimore enacted legislation directing the city’s three pension funds to divest from fossil fuel companies. New York City, Washington, D.C., and most recently, Chicago, have also directed their pension funds to divest from the fossil fuel industry. The international fossil fuel divestment movement has accomplished the divestment of almost $40 trillion dollars worth of assets.
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The CCAN Action Fund is the advocacy arm of the Chesapeake Climate Action Network, the oldest and largest grassroots organization dedicated exclusively to raising awareness about the impacts and solutions associated with global warming in the Chesapeake Bay region. For almost 20 years, CCAN has been at the center of the fight for clean energy and wise climate policy in Maryland, Virginia, West Virginia, and Washington, D.C. 350MoCo fights for climate justice and fossil fuel divestment in Montgomery County, MD, and has led on multiple local and state climate issues, including making the County set some of the strongest greenhouse gas reduction targets in the nation.