MONTPELIER — Gov. Peter Shumlin made an appeal on Tuesday to the board that oversees the state's public retirement funds to shed investments in coal companies and the oil giant Exxon Mobil in an effort to combat climate change.
The Vermont Pension Investment Committee gave the governor's request a cool reception but voted to set up a special subcommittee to study the issue, a move environmentalists praised as progress on a contentious issue.
Science organizations and climate scientists say the world is warming, mainly due to rising levels of carbon dioxide and other greenhouse gases. Most of the increase in temperature, they say, comes from man-made sources including the burning of coal, oil and natural gas, deforestation and livestock raising.
Shumlin, a Democrat, urged the pension investment committee to follow the lead of many major financial institutions, including Wells Fargo, Morgan Stanley and Goldman Sachs, which have been backing away from investments in the struggling coal industry. He also pointed to a Citigroup report that fossil fuel companies could face $100 trillion in stranded assets, raw materials left in the ground, if policy changes in response to global warming force them not to mine and drill for remaining reserves.
That's "not the type of industry I would want my money invested in, or Vermont's money invested in," Shumlin said.
Shumlin, who's not seeking re-election this year, called in his final State of the State Address last month for lawmakers to pass legislation ordering a divestment from coal companies and Exxon Mobil while Vermont awaits the completion of a study by California into divesting from fossil fuels completely.
He has singled out Irving, Texas-based Exxon Mobil Corp. among oil companies, citing news reports it has known about the dangers of climate change for decades while downplaying those dangers in public for much of that time, a claim the company has denied.
Shareholders at Exxon Mobil and other oil companies in May overwhelmingly rejected several environmental resolutions including proposals to put climate change experts on their boards and set goals for greenhouse gas emissions. Exxon CEO Tillerson has said models predicting the effects of global warming aren't very good and technology can help deal with rising sea levels or changing weather patterns "that may or may not be induced by climate change."
Shumlin's call for legislation on the issue has drawn strong resistance from state Treasurer Beth Pearce, also a Democrat, and from unions representing teachers, police officers and state employees whose pensions funds are at the center of the debate. They insist investment decisions should be left to the investment committee, its affiliated boards and the consultants working with them.
Also Tuesday, Rep. Maida Townsend, of South Burlington, introduced to her colleagues in a Democratic caucus meeting a resolution that would be less binding than the bill supported by Shumlin, calling on the investment committee to weigh carefully the issues and trends described by the governor and others concerned about climate change.
Pearce said later she appreciated the resolution's call for having the investment committee, not the Legislature, make decisions about investments.