Dear Dr. Rebecca Wyke and MainePERS staff and board,
We are writing to voice our support for MainePERS implementing LD 99, the law passed in 2021 requiring that the state of Maine and MainePERS divest from fossil fuels by 2026.
Implementing LD 99 is a critical step in mitigating climate change, which is already adversely impacting our state’s infrastructure and economy. The Gulf of Maine is the fastest warming body of water on the planet. As Mainers have seen this winter, storms are more intense and more frequent, with often devastating impacts on the infrastructure of coastal towns. Maine fishermen brought in their smallest catch since 2009 recently as lobsters migrate north to avoid warming waters. Despite the climate impacts seen in Maine, pension funds like MainePERS are one of the largest financiers of the fossil fuel industry.
The science is clear: “The vast majority of the world’s known fossil fuel reserves must be kept in the ground to have even a 50% chance of keeping global temperatures from rising 1.5 degrees Celsius above pre-industrial levels.” As stated by the Climate Safe Pensions Network “Nearly 30% of fossil fuel industry shares are held by pension funds – with as much financial power as pension funds hold, they could be a force to reckon with in the battle to confront, slow and mitigate climate change.” MainePERS must divest from fossil fuels to help mitigate climate change and protect the retirement future of Maine’s public employees.
Divesting from fossil fuels has also proven to be legally sound and fiscally right, as the fossil fuel industry is underperforming and is threatened by stranded assets. Financial experts estimate MainePERS lost $567 million in the last decade from their public equity investments in fossil fuels. This figure is based only on publicly traded investments, which represent only half of total investments. This trend is not isolated to MainePERS; a 2023 report from the University of Waterloo estimates that U.S. public pensions could be $21 billion richer had they divested from fossil fuels a decade ago. MainePERS is using a misinterpreted cover of fiduciary duty and the false assertion that the institutional investment sector is just too complex for any lay-person to understand to obfuscate and be derelict in its duty to current and future pensioners.
Divestment is no longer novel. With a decade of data, more than 1,600 institutions representing over $40 trillion in assets have committed to some form of fossil fuel divestment. This includes pension funds in New York City, New York State, California, and Oregon. If other pension funds can divest from fossil fuels, why can’t MainePERS divest when it is directed by state law to do so?
We ask that MainePERS protects the hard earned savings and the retirement future of public employees by implementing LD 99 and divesting from an underperforming industry that is fueling the climate crisis. We demand that MainePERS do as much as it can to implement LD 99 responsibly. We believe these steps include, at a minimum:
Exclusion of fossil fuels from the public equities and fixed income portfolios.
A written commitment within the Investment Policy Statement to investing in no new private fossil fuel assets and to let existing private investments in fossil fuels run-off.
Including climate risk in the risk-return assessment that is conducted when making new investments.
