New York moves to divest: Case Study from the Largest Municipal Pension Fund in the US

When New York City Mayor Bill de Blasio and several trustees of the City’s pension funds announced their intention to begin the process of divesting from fossil fuel reserve owners by 2022, the move positioned the City at the center of the fossil fuel divestment movement. This case study aims to show peer cities, large and small, that the principles and processes behind fossil fuel divestment are transferable to nearly any location where the will to divest exists. 

Although New York City is at the beginning of its divestment process, lessons learned from the lead up to its pioneering announcement are useful to cities, towns, and counties everywhere that may be interested in where to begin. This case study aims to be a resource for peer cities, big and small, that know of divestment only in its institutional context. New York City's case illustrates how the movement can move off college campuses and into City Hall. For city finance officers who still waiver on whether a complete shift away from fossil fuel holdings is fiscally responsible, New York City shows that now is the time to act on mounting evidence that fossil fuel stocks will continue to underperform. 

Some of the sucesses and lessons learnt through the process include:

• Effectively engaging stakeholders accounted for the relevant parties comprehensively understanding the pension portfolio, accepting a definition for fossil fuel companies, and deciphering the proportion of City funds currently tied up in those companies. The process was data-driven and people-driven.
• Considering and proceeding with caution around legal and jurisdictional issues around fossil fuel divestment 
• Expanding avenues for engagement and collabortation between residents and the city leadership on climate and economic action 'close to home'
• Apart from the city leadership, however, a natural conservatism in the financial industry, which is sometimes substituted for prudent judgement, can prove to be an impediment to progress on divestment
• Addressing concerns the local governments have about replicability of the policy