As head of the nation's largest city, de Blasio is throwing significant weight behind a movement by local governments to directly target fossil fuel companies for the role their products play in fueling global warming.
"They are the first ones responsible for this crisis, and they should not get away with it anymore," de Blasio said at a news conference held in a building that flooded when Hurricane Sandy hit the city in 2012. "It's time for them to start paying for the damage they've done."
With the divestment plan, the city's pension funds are among the largest investors globally to announce their intention to sell their fossil fuel holdings. And by filing suit, too, New York is jumping into an international fight over who should pay the growing costs imposed by a warming climate.
The lawsuit, filed Tuesday in federal court, seeks damages from the five largest publicly-traded oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—to help pay for the city's work adapting to climate change, including coastal protections and upgrading its sewer system. The suit requests a judgement determining the current and future costs incurred by the city and what portion the companies should pay for.
The complaint cites research showing the companies' products have contributed more than 11 percent of all the greenhouse gas pollution since the Industrial Age began. It also says the companies "orchestrated a campaign of deception and denial regarding climate change" by funding efforts to discredit the science on climate change even though their scientists had warned them of the risks and the role of fossil fuels in causing it.
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In the Funds' Financial Interest
De Blasio and City Comptroller Scott Stringer announced a "goal" to sell the assets that its five pension funds hold in companies that own reserves of fossil fuels within five years. The first step will be seeking approval from the funds' trustees—which the mayor and comptroller said they were confident they could secure—to begin an analysis of how to sell the securities "in a responsible way that is fully consistent with fiduciary obligations" of the funds.
At the new conference, both stressed that this would be in the funds' financial interests, both because energy companies have been underperforming compared to market indices and because any substantial global action to limit climate change could prevent the companies from exploiting all of their oil and gas reserves.
In November Norway's central bank recommended that that country's sovereign wealth fund sell its $35 billion invested in oil companies for similar reasons.
Bill McKibben, the co-founder of 350.org, who has been watching the climate fight for more than 30 years, said: "This is one of a handful of the most important moments in that fight."
Similar to the lawsuit, any individual divestment has only a limited impact, said Andrew Logan, director of the oil and gas program at Ceres, a nonprofit that promotes sustainable investment. "New York selling or not selling its shares isn't necessarily going to keep the industry up at night," he said. But if other cities or states follow New York's lead, "that does have real risks for the industry."
Read more at NYC Sues 5 Oil Giants over Climate Change, Plans Fossil Fuel Divestment
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