Seattle has long been an outspoken advocate for various causes and the environment is no exception. After the U.S. withdrawal from the Paris Accord, many cities and states, along with Seattle, reaffirmed their commitment to the agreement.
Recently the Seattle City Council passed a resolution committing the city to uphold the Paris Accord. However, one of the recommendations in the resolution was the divestment from energy companies of the Seattle City Employees’ Retirement System (SCERS), the municipal pension system of Seattle. There are about 4,000 employees covered under the plan.
Seattle’s pension system has had some issues, like many funds throughout the country. According to the Seattle Times, between 2000 and 2014, the unfunded liabilities of the fund went from a surplus of $179,600,000 to over $1.1 billion in unfunded liabilities. Between 2000 and 2010, SCERS managed a frustratingly low return of just 2% annually. While the issues with SCERS are not as severe as those at some other funds throughout the country, limiting the investment options of the fund would only endanger the retirement incomes of Seattle’s municipal employees.
Seattle could take note of the position of New York Comptroller Tom DiNapoli, a supporter of the Paris Accord, who spoke out against divestment, saying that he had “no plans to divest completely.” DiNapoli has supported engagement as the most effective way to change corporate behavior saying, “if we weren’t shareholders, we wouldn’t have the ability to move the company in the right direction.”
Seattle’s quest to reduce the carbon footprint of their city is a laudable goal, but exploiting the retirements of civil servants to make a symbolic statement should not be an option. Numerous studies have shown that limiting investment options though divestment will not only incur losses, but also has no effect on protecting the environment.