FOR IMMEDIATE RELEASE
PLEASE CONTACT: David Gibson, Executive Committee Vice Chair, Sierra Club Maine: davidgibson1@gmail.com, 207-323-2208
April 1, 2021 -- Maine Public Employee Retirement System, or MainePERS, suffered tremendous losses on their fossil fuel investments last year. This information comes from testimony submitted by MainePERS to the Legislature’s Labor and Housing Committee on LD 99, An Act To Require the State To Divest Itself of Assets Invested in the Fossil Fuel Industry.
Sierra Club Maine testified in February in support of divesting MainePERS from fossil fuels. This testimony, provided by Sierra Club Maine Vice Chair David Gibson, identified more than $1 billion in fossil fuel investments, and estimated the impacts those investments had on the MainePERS portfolio over the past decade. In the Sierra Club testimony, Gibson also identified environmentally positive investments that MainePERS could make instead of propping up the fossil fuel industry, which is the leading cause of climate change globally. Gibson says, “My parents and my brother are all teachers in Maine. They are depending on MainePERS for their retirement. It astounds me that MainePERS is gambling their future on fossil fuel investments, which are certain to fall as we transition to clean energy around the globe.”
However, more recent supplemental testimony from MainePERS clearly shows the losses suffered due to their fossil fuel investments. In the past year, their fossil fuel investments lost 9.45%, dropping $133 million from $1,410,536,764 to $1,277,274,410. Over that same time period, the remainder of the MainePERS portfolio gained 9.17%. Sierra Club calculations show that if these fossil fuel holdings had been divested a year ago and achieved the same 9.17% return, they would have gained $129 million instead of losing $133 million. Together, this equates to a $262 million net cost to the Maine Retirement system for continuing to invest in fossil fuels over the past year. With approximately 100,000 PERS members across the state, this could have provided an additional $2,600 per member for their retirement.
Looking back a little further, many of these fossil fuel investments had already been losing value before the pandemic. The S&P 500 Energy Sector (composed entirely of fossil fuel stocks) had lost 16% from 2011 to the end of 2019, while the remainder of the S&P 500 gained 150% over the same period. Over the 8 year period prior to the pandemic and recession, MainePERS had directly lost hundreds of millions of dollars on their fossil fuel investments, but more importantly they missed out on over $1 billion in gains that were achieved by the rest of the market. Fossil fuels have been a terrible investment, and have already cost MainePERS members dearly.
Looking forward, the future for the fossil fuel industry is bleak. Industry analysts at BP say that global oil usage peaked in 2019. President Biden is committed to strong climate action, curbing carbon emissions, and curtailing fossil fuel consumption with 100% clean electricity by 2035 and net-zero carbon emissions by 2050. 189 other nations have signed the Paris Climate Accord. Many states, including Maine, California, and New York, have Renewable Portfolio Standards that require 100% clean electricity by 2050, or sooner. More than 280 corporations, including household names like Amazon, Walmart, Google and Microsoft, have committed to 100% renewable electricity in their operations, and some have already met that goal. Globally, we are committed to the transition from fossil fuels to clean energy.
Here in Maine, the Governor’s Climate Council created the Maine Climate Action Plan, ‘Maine Won’t Wait’ over the past year. Professionals from every sector of our economy came together to identify climate solutions that work. MainePERS’ continued investments in fossil fuels runs counter to the climate action plan. Instead, these funds could be invested into climate solutions like energy efficiency and clean energy, and would achieve greater returns for PERS members in the process. Gibson says, “Divesting $1.3 billion from the fossil fuel industry is one of the biggest steps that Maine can take to address climate change in the short term. I hope that Mainers and particularly Public Employees will encourage their legislators to support divestment and vote in favor of LD 99.” LD 99 is scheduled for a work session in the Labor and Housing Committee on April 14th.
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Sierra Club Maine is one of 64 chapters nationally with 4 million members and supporters. Working in Maine for over 40 years, Sierra Club Maine has over 20,000 members and supporters across the state. As a volunteer-run, grassroots organization, Sierra Club Maine believes in the power of people working together to make change happen. Their mission is to explore, enjoy, and protect the wild places of the earth; to practice and promote the responsible use of the earth’s ecosystems and resources; to educate and enlist humanity to protect and restore the quality of the natural and human environment; and to use all lawful means necessary to carry out these objectives.