Divestment

One of Maine Youth for Climate Justice’s priorities is to advocate for the state of Maine, and specifically the Maine Public Employee Retirement System (MainePERS), to divest from fossil fuels. 

In 2020, MYCJ and Maine Strikes (now Maine Youth Action) worked with Sierra Club Maine and 350 Maine to educate Mainers about fossil fuel divestment and the important role it plays in a just transition from fossil fuels. These organizations co-hosted a webinar on Earth Day about the concept of divestment and the history of fossil fuel divestment campaigns in Maine. Visit divestmaine.org for more information!

State pension funds, including MainePERS, are some of the biggest investors in a specific fund that owns the General James M. Gavin Power Plant, a coal-fired power station (pictured above).

Our Demands

We demand that MainePERS do as much as it can to implement LD 99 responsibly. We believe those 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

• Implement these steps by June 30th, 2024.

The Story

In 2021, Maine passed LD 99, An Act To Require The State To Divest Itself Of Assets In The Fossil Fuel Industry. This legislation was passed through an intergenerational, collaborative effort. LD 99 impels MainePERS to divest the 1.2 billion of pension funds that are currently tied up in industries which directly fuel the climate crisis. 

MainePERS has not listened. They are taking an overly cautious approach to divestment that conflicts with the timeline that science and justice require. To make matters worse, they are using vague language and not explicitly committing to forgoing new fossil fuel investments.

• Why do our demands matter for the stakeholders, those impacted by the MainePERS fossil fuel investments? 

• MainePERS has argued that divestment violates their “fiduciary responsibility” to pensioners, yet fossil fuels are not a safe investment since the sector has underperformed the market over a decade and has a poor long-term outlook. Staying invested in fossil fuels puts the public purse and taxpayers on the hook to make up investment shortfalls from a volatile and declining sector.

• We estimate MainePERS lost $567 million* in the last decade from their public equity investments in fossil fuels. This figure is only based on  publicly traded investments, which are only half of the total investments.

• Pensioners deserve better out of their retirement funds than investment in companies that actively damage the ground on which they walk, the water they drink, and the air they breathe

• Why do our demands matter for all Mainers?

• MainePERS money currently invested in the fossil fuel industry could be invested into climate solutions for Maine. These funds can provide hundreds of millions of dollars in investment for clean energy in our state.

• Divesting is a key climate action strategy that would help protect the Maine we love: the clean waters of Sebago Lake, the cliffs of Mount Katahdin, the communities where we live, grow, and work.

• Why are our demands urgent?

• The climate crisis needs to be addressed with the urgency that science and justice requires. Fossil fuel divestment is part of the urgent action that needs to occur worldwide. 

• The investment market is increasingly shifting away from fossil fuels, a change that MainePERS should keep up with in order to not fall behind. Currently, over 1,600 institutions have made fossil fuel divestment commitments. These institutions have an approximate value of $40.63 trillion dollars

• Pension funds are in crisis, and need to be divesting and re-investing in innovative, forward-thinking ways to protect their pensioners.

• One of the MainePERS fossil fuel investments created an environmental justice disaster that poisoned drinking water for thousands of low-income residents living near the refinery. In the four-year time that MainePERS owned this investment, the private equity fund lost ~96% on it.

MainePERS is invested in the deadliest coal plant in the United States. Furthermore, the MainePERS investments have helped keep the plant running, otherwise it would have closed in 2018.

*Our estimate is based on the difference in cumulative returns over the 10 years ending 6/30/2023 between the MSCI All Cap World Index (ACWI) and MSCI ACWI Ex Fossil Fuel index. The $567 million lost is the difference between the two cumulative return figures applied to MainePERS reported $6.09 billion in public equity funds at 6.30.2012. A more detailed and customized analysis is possible with additional data from MainePERS.

MYCJ, Maine Youth Action, Sierra Club Maine, Third Act Maine, and Maine Climate Action Now, with support from Institute for Energy Economics and Financial Analysis and Stand.earth, are now pushing MainePERS to implement LD 99. Join us!