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City of Seattle

December 21, 4:00 PM click here to comment > 30

An update on fossil fuel divestment

On November 7 members of Seattle’s Green Ribbon Commission joined Bill McKibben of 350.org in my office for a roundtable discussion on climate change. The Green Ribbon Commission has been preparing recommendations that will inform Seattle’s work toward reaching carbon neutrality by 2050.

Bill offered his thoughts and advice on how Seattle as a city can help the worldwide effort to limit carbon emissions into the atmosphere. His article in Rolling Stone this summer, “Global Warming’s Terrifying New Math”, is the cornerstone to his new approach. His tour, which launched here in Seattle, is called Do The Math. Their tour focuses on this new math and the role fossil fuel corporations play in increasing carbon emissions:

It’s simple math: we can burn 565 more gigatons of carbon dioxide and stay below 2°C of warming — anything more than that risks catastrophe for life on earth. The only problem? Fossil fuel corporations now have 2,795 gigatons in their reserves, five times the safe amount. And they’re planning to burn it all — unless we rise up to stop them.

350.org is asking schools, churches and governments to immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.

After the roundtable, I spoke to my finance administrator about this issue. That night, I announced from the stage at the “Do the Math” kickoff event at Benaroya Hall that I would look at how the City of Seattle can move toward divestment from fossil fuel corporations. Since then, I’ve been working with City staff to examine the steps we must take to make divestment a reality. Here’s what we’ve found.

The City oversees three sets of investments: 1) $1.4 billion in cash balances for daily operations – essentially the City’s checkbook balances; 2) $700 million of our employees’ investments from the City’s deferred compensation plan; and 3) our pension system, with holdings valued at $1.9 billion. The first category is the only one I control directly. City staff report that none of that money is currently invested in fossil fuel companies. I have directed the City’s Finance Director, Glen Lee, that the City will not invest in those cash balances in fossil fuel companies in the future.

I do not have sole control over employees’ deferred compensation plans or our pension system. Employees decide where to invest their money in the deferred compensation plans, which are administered by the Deferred Compensation Plan Committee. I have written to the Committee to ask that they offer our employees options to move their investments out of fossil fuel companies, offer fossil fuel free investment choices to them, and begin the process of divestment.  I have also offered the assistance of city staff.

Seattle’s pension system is managed by a governing board that is made up of appointees and individuals elected by City employees. Two of the system’s top 10 investments are with ExxonMobil and Chevron. The pension system has currently $17.6 million invested with these two firms, which represents just under 1% of the system’s $1.9 billion in assets. It is likely the system has investments in other fossil fuel-related entities as well.

I have written to our pension system governing board to request that they refrain from investing in fossil fuel companies in the future, and begin exploring options for moving existing investments from fossil fuel companies. I will work with the City Council, City staff and the pension board on pursuing divestment in that portfolio.


Photo courtesy of 350.org

Divestment is just one of the steps we can take to address the climate crisis. Through the Green Ribbon Commission, we are working to integrate our climate goals with our job creation and social equity goals. Cities that do so will be leaders in creating a new model for quality of life, environmental sustainability and economic success. We’ve got a head start on that here in Seattle, but there’s a lot more work to do.

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Posted by: Mayor Mike McGinn

Comments

Comment from Jill MacIntyre Witt
Time December 21, 2012 at 7:37 pm

Thank you Mayor McGinn for taking a step forward in divestment from fossil fuels. This is a step in the right direction and hopefully Seattle will lead by example for other cities to follow.

Pingback from The Weekly News Divest for 12/21/12 « Barnard Columbia Divest!
Time December 22, 2012 at 7:38 pm

[...] An update on fossil fuel divestment A success: the mayor in the city of Seattle is divesting the city’s cash balances for daily operation ($1.4 billion) from fossil fuel companies. While the mayor does not have control of Seattle’s pension system ($1.9 billion with at least $17.6 million invested in fossil fuel companies) or employee’s investments from the city’s deferred compensation plan ($700 million), he has taken steps to hopefully have them divest from fossil fuel companies so that the city of Seattle will be completely divested from these companies. [...]

Comment from Maggie Scott
Time December 23, 2012 at 2:21 am

Dear Mayor McGinn,

I hear that you’ve requested that Seattle’s pension funds divest from fossil fuels. That’s great news! Thank you so much. Climate change is the most important issue of our time and not enough is being done about it. We can’t wait for the federal government to finally wake up and take action. What you did is a big step. Please encourage other cities to follow your example. Thank you!

Comment from Lawrence Licklider PhD
Time December 23, 2012 at 10:15 am

Thank you Mayor McGinn -for mustering and demonstrating the leadership we urgently require. Thank you on behalf of our children and (hopefully) the children they bring to this world in the decades ahead.

Pingback from Seattle mayor calls for city’s pension funds to dump oil stocks | Grist
Time December 26, 2012 at 10:39 am

[...] is the first municipal leader to get on board with 350′s campaign. As the mayor explains on his blog, he doesn’t control the investment of pension funds, but he and his staff want to work with [...]

Pingback from Seattle mayor calls for city’s pension funds to dump oil stocks | "Global Possibilities"
Time December 26, 2012 at 1:08 pm

[...] is the first municipal leader to get on board with 350′s campaign. As the mayor explains on his blog, he doesn’t control the investment of pension funds, but he and his staff want to work with the [...]

Pingback from Seattle mayor calls for city’s pension funds to dump oil stocks | GreenEnergy4.us
Time December 27, 2012 at 9:25 am

[...] is the first municipal leader to get on board with 350′s campaign. As the mayor explains on his blog, he doesn’t control the investment of pension funds, but he and his staff want to work with the [...]

Comment from David Perlmutter
Time December 28, 2012 at 12:41 pm

Dear Mayor McGinn,

Thank you for your work in divestment from fossil fuels. This progress is most encouraging! Please continue to everything in your power to direct the Deferred Compensation Plan Committee to redirect its fossil fuel-related investments.

Thank you

Comment from Frank Turner
Time December 28, 2012 at 2:02 pm

What, in your opinion, constitutes a “fossil fuel”? The effort is a noble-one but one person’s definition might vary drastically from another’s. Which companies, other that Exxon and Mobil are you targeting?

Thank you.

Frank Turner

Comment from wm vadnais
Time December 28, 2012 at 3:26 pm

I would like to see Seattle get a N h L team
whish you the best in trying to bring the nhL to seattle i;am i senior citisyne

Pingback from Why The Green Urbanistas Got McGinn Elected | citytank
Time December 28, 2012 at 4:09 pm

[...] his recent decision to pursue divestment in fossil fuels  is exactly the kind of bold move that McGinn’s [...]

Pingback from The Reader – Update on fossil fuel divestment | Seattle, WA 98122
Time December 28, 2012 at 4:56 pm

[...] can move toward divestment from fossil fuel corporations. Since then, we’ve been examining the steps we must take to make divestment a reality. We will not invest our cash balances in fossil fuel companies, and we [...]

Comment from Andy Brinkhaus
Time December 29, 2012 at 1:20 am

@Frank Turner… a fossil fuel is one that is carbon-based and usually mined out of the ground. A few that come to mind are coal, oil, natural gas and all their derivatives.

Pingback from Eradicating Ecocide in Canada – Seattle mayor calls for city’s pension funds to dump oil stocks
Time December 29, 2012 at 5:27 am

[...] is the first municipal leader to get on board with 350′s campaign. As the mayor explains on his blog, he doesn’t control the investment of pension funds, but he and his staff want to work with the [...]

Comment from David Sokal
Time December 30, 2012 at 6:17 pm

Divestment from the investor end is a good idea. In addition to the most obvious action we can take individually, (and organizations can take collectively), namely, simply not using fossil fuel power for transport, heat, etc. whenever feasible, this measure should send a strong message and have a real economic impact on fossil fuel extraction, processing and distributing companies. Someone in these comments asks for the definition of a fossil fuel. This is actually very simple. Fossil fuels are coal, oil and gas. The 2,795 gigatons of fossil fuel in the oil/coal/gas industry’s inventory that McKibben is warning us about are the greatest human released contributors to global warming/climate change. Since we don’t control releases of carbon dioxide (currently the main overall contributor to global warming) by natural events, such as volcanoes or decomposing biomass, it is logical to reduce warming resulting from extracted sources that we do control. I applaud the mayor for taking yet another courageous stance on the environment and leading the way where others have failed. As a result of reading about this action by the mayor I am reconsidering my retirement investments in traditional mutual funds that all include shares in oil, coal and gas companies. I suggest that others might do the same.

Comment from Daniel Parker
Time December 31, 2012 at 7:07 pm

As a Seattle engineering firm focused exclusively on renewable energy projects, we applaud the Mayor’s support for divestment from fossil fuels. We have the technology to source our energy needs from renewable sources, all we need is the leadership!

Pingback from No More Dirty Money: Seattle Pledges Fossil Fuel Divestment | Care2 Causes
Time January 11, 2013 at 5:02 am

[...] [...]

Pingback from | Blog | No More Dirty Money: Seattle Pledges Fossil Fuel Divestment
Time January 12, 2013 at 7:30 pm

[...] deferred compensation plan; and 3) our pension system, with holdings valued at $1.9 billion, reports Seattle Mayor Mike McGinn on his official website. “The first category is the only one I control directly. City staff [...]

Pingback from Councillor Reimer: Vancouver’s investment should align with its goals | Steady City
Time January 23, 2013 at 10:38 pm

[...] motion is broader than recent divestment plans from Seattle’s Mayor; “alignment” implies an extra step beyond divestment. Unlike Seattle, however, Reimer [...]

Pingback from The Future of Campus Sustainability : Wildlife Promise
Time January 31, 2013 at 12:31 pm

[...] briefly on the current student-driven movement to divest from fossil fuels (which now includes cities, churches, 210+ campuses and at least one or two senators) as a good start. I’ll add that [...]

Pingback from Bursting the Carbon Bubble | The Simplicity Collective
Time February 19, 2013 at 5:13 am

[...] isn’t the first to say so. In December, Seattle mayor Mike McGinn declared that the city’s cash balances – the US$1.4 billion it uses to manage its daily operations – [...]

Pingback from Can a Divestment Campaign Move the Fossil Fuel Industry? – Yale Environment 360 : INVEST WEB
Time March 18, 2013 at 9:36 am

[...] what can be a long and difficult process. Second, the promise came not from a university, but from Mike McGinn, the mayor of Seattle, making the city the first in the U.S. to embrace fossil fuel [...]

Pingback from | Blog | Can a Divestment Campaign Move the Fossil Fuel Industry?
Time March 19, 2013 at 6:40 am

[...] what can be a long and difficult process. Second, the promise came not from a university, but from Mike McGinn, the mayor of Seattle, making the city the first in the U.S. to embrace fossil fuel [...]

Pingback from Can Fossil Fuel Divestment Prevent The Carbon Bubble From Bursting?
Time April 26, 2013 at 8:07 am

[...] to climate change,” said Supervisor John Avalos. San Francisco now joins governments in Seattle, Ithaca, and seven other cities pushing for divestment, and if SFERS agrees to the request, it [...]

Pingback from Can Fossil Fuel Divestment Prevent The Carbon Bubble From Bursting? – Cleantech Reporter
Time April 26, 2013 at 10:13 am

[...] response to climate change,” said Supervisor John Avalos. San Francisco now joins governments in Seattle, Ithaca, and seven other cities pushing for divestment, and if SFERS agrees to the request, it [...]

Pingback from Can fossil fuel divestment stop carbon bubble from bursting? : Renew Economy
Time April 28, 2013 at 6:43 pm

[...] Francisco now joins governments in Seattle, Ithaca, and seven other cities pushing for divestment, and if SFERS agrees to the request, it [...]

Pingback from Marcacci Communications
Time May 3, 2013 at 7:06 am

[...] response to climate change,” said Supervisor John Avalos.San Francisco now joins governments in Seattle, Ithaca, and seven other cities pushing for divestment, and if SFERS agrees to the request, it [...]

Pingback from Rally with the Regents was a success | Divest UW
Time June 14, 2013 at 10:03 am

[...] Councilmember Mike O’Brien who talked about how the City of Seattle became the first city to publicly commit to divestment from fossil fuel companies. It was encouraging to hear how quickly the City chose to [...]

Pingback from Divestment Campaigners Look Beyond Fossil Free to Fund Solar Utopias | Women Born Transsexual
Time June 18, 2013 at 10:05 pm

[...] scour the city’s $1.5 billion short-term investment pool for fossil fuel securities, and to eliminate them. San Francisco’s recent vote was a nonbinding resolution urging the San Francisco [...]

Comment from Bentm
Time October 10, 2013 at 9:53 am

Terrific! Local change like this provides national leadership!
…now let’s get the UW and others on board.

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