The old saying goes that politics is the art of the possible.
Nowhere has that been more apparent in Vermont politics than in the battle over fossil fuel divestment.
The global effort to divest major institutions out of fossil fuels — to sell off any assets they held in coal, gas and oil companies — began on college campuses six years ago.
It soon spread to other institutions. Now it’s been joined by big players such as Norway’s sovereign investment fund, the German financial services giant Allianz, and California’s pension fund. They have all committed to partially or fully divest out of fossil fuel polluters.
Globally, organizations and individuals have collectively pledged to sweep fossil fuels out of portfolios that are worth more than $5 trillion. Divestment is no longer some quirky college-kid idea.
Even the Rockefeller Family Fund, whose fortune was founded on oil, is divesting.
This movement for cleaner investments has exposed the “carbon bubble”: the long-term financial risks involved with fossil fuel investments. In the short term we’ve already seen coal company bankruptcies and plunging oil company stocks.
The campaign has also succeeded in beginning to stigmatize fossil fuel companies.
Despite all the conveniences of modern life that fossil fuels have brought us, today’s companies are now rightly seen as dangerous polluters. Their dinosaur business plans require wrecking the planetary climate, and their financial and political might imperil the necessary transition to clearer energy.
Lou Allstadt, a former senior executive at Mobil Oil, put it this way: “Divestment is speeding up the clock on the final accounting that will show fossil fuels are out and clean energy is in.”
A late-2016 statement from May Boeve, a Middlebury College grad and head of divestment leader 350.org, summed up the scope of the movement:
“As the hottest year in history comes to a close, the success of the global fossil fuel divestment movement is undeniable,” she said. “Divestment has permeated every sector of society: from universities and pension funds, to philanthropic and cultural institutions, to cities, faith groups, insurance companies and more.”
Here in Vermont, early efforts to get Middlebury College and UVM to divest sputtered in the face of staunch “no’s” from trustees. But others — Green Mountain, Sterling and Goddard colleges — have joined the scores of U.S. colleges and universities that refuse to invest in dirty fuel companies.
Divestment makes a lot of sense for a state like Vermont, where green jobs provide an economic bright spot and where state government has theoretically committed itself to having 90 percent of its total energy sources be renewable by 2050.
Last year, then-Gov. Peter Shumlin called on the state to divest out of coal companies and ExxonMobil. That followed revelations Exxon knew about the dangers of climate change for more than 20 years and hid that knowledge from investors and the public. (Side note: former ExxonMobil CEO is now the U.S. Secretary of State, which shows you who’s running the show in Washington these days.)
There was also ample precedent for Vermont to divest out of morally objectionable companies.
As part of the successful global effort to make apartheid South Africa a pariah, the state divested out of companies that did business with the racist regime. Vermont also divested out of tobacco companies, at the direction of then-Treasurer Jim Douglas, the Middlebury Republican.
But the actual process of divesting Vermont from fossil fuels — well, that’s proved over the past couple of years to be a long and winding road.
Nonetheless, thanks to recent actions, the state is now a leader in adopting a cleaner, greener investment policy for its $4 billion pension funds. Those investments cover teachers, state employees and many municipal employees.
But the state’s pension funds are not yet fully divested, despite impressive efforts by 350Vermont.org, the Sierra Club and others.
Outright divestment faced staunch opposition from state Treasurer Beth Pearce (an elected Democrat), some public employee groups, and members of the Vermont Pension Investment Committee (VPIC), which oversees pension funds.
It turned out that the “possible” in this political process was a policy statement — recently adopted by VPIC after months of study and debate — that puts the state on the path to a “low-carbon future.”
VPIC has committed to adopt better environmental, social and governance (ESG) guidelines. These will screen out investments in bad actors and promote greener, more social responsible companies.
The state will create a distinct section of its investment portfolio devoted to renewable and energy-efficiency investments. It will also continue to discuss greener investments with its financial advisors and explore working with other states to jointly clean up their portfolios.
“These steps position the Vermont fund to capitalize on a global transition to a low-carbon economy,” said Austin Davis of 350 Vermont, who’s led the statewide divestment coalition. “By revising policies and more closely monitoring these ESG factors and financial reporting, the state’s investment fund will be healthier and more profitable.”
Moreover, these steps fit nicely with the efforts of Renewable Energy Vermont, the state’s solar and wind industries, the push for “fee and dividend” pricing of carbon, and the Vermont Council on Rural Development’s campaign for a “climate economy.”
All of these groups are, in Davis’s words, “playing the long game” within the constraints of politics and finances.
Divestment supporters are keenly aware that time is running short.
But we live in a time when federal energy and environmental policies under Carbon King Trump are moving backward into the 19th century. Even in tiny Vermont, shifting to a cleaner state investment policy has proven to be a difficult process.
So given the thicket of conflicting interests around state divestment — the need for high investment returns, political opposition from Republican legislators and some public employees, and the new governorship of construction company owner Phil Scott — the success of the Vermont divestment movement shouldn’t be underestimated.
Low-carbon future, here we come.
Gregory Dennis’s column appears here every other Thursday and is archived on his blog at www.gregdennis.wordpress.com. Email: [email protected]. Twitter: @greengregdennis.