Chicago joins bandwagon of cities divesting city funds from fossil fuel companies

Chicago on Monday climbed aboard the bandwagon of cities mandating divestment of city funds from fossil fuel companies to promote a “clean energy future” for a world buffeted by climate change.

Even before the groundbreaking vote by the City Council’s Joint Committee on Finance and Environmental Protection, City Treasurer Melissa Conyears-Ervin got a running start and “divested all applicable funds” from the “top 225 fossil fuel companies.”

“This process has happened over the last 18 months through the divestiture of more than $70 million through sales and maturities,” Conyears-Ervin said.

Although that’s fraction of the city’s portfolio, Conyears-Ervin said $70 million is “not a drop in the bucket for Chicagoans. For Chicagoans, these dollars represent our future.”

The ordinance advanced Monday and championed by Conyears-Ervin and Mayor Lori Lightfoot would mandate a similar investment policy going forward.

No city treasurer could invest or re-invest city money in fossil fuels.

Conyears-Ervin said it’s high time Chicago divest from fossil fuels and join “some of the most forward-thinking and forward-acting cities in the world … that do not invest in fossil fuel companies that fail to protect our planet from climate change.”

Cities taking similar steps include New York, Los Angeles, San Francisco, Houston, Austin, Boston, New Orleans and Philadelphia, as well as a host of cities large and small worldwide.

They’re among “roughly 1,500 institutions representing $39 trillion in assets” that have committed to “some form of divestment,” alderpersons were told.

Besides confronting climate change, Conyears-Ervin said moving away from fossil fuels is “smarter investing” that upholds her responsibility to ensure a “stable fiscal future” for Chicago.

During the first year of the pandemic, over 100 oil and gas companies in North America declared bankruptcy, she noted.

“Two years later, a crisis is unfolding in Ukraine and the oil industry is, once again, at the center of chaos,” she said.

“So while some investors who don’t mind risk might decide that this is the right time to take a chance, municipalities have a responsibility to be far more risk-averse as we look to protect and grow taxpayer dollars. So divesting of fossil fuels is simply smarter investing and a part of upholding our fiduciary responsibility to the taxpayers of this city.”

Gavin Taves serves as climate and energy project manager in the mayor’s office. Taves hailed the ordinance as a “deeply impactful strategy that will put Chicago at the forefront of the climate movement.”

“Divesting city funds from the top 225 coal, oil and gas reserve owners embraces both the severity of the climate crisis and the volatility of the current and future energy markets,” Taves told the joint committee.

“If the crisis in Ukraine and the financial volatility of markets has taught us anything, relying on fossil fuels should be critically examined wherever possible.”

Scientists worldwide, including many experts here in Chicago, have “conclusively determined that unaddressed climate change will wreak havoc on the most under-served and over-burdened communities,” Taves said.

“On the ground in Chicago, those climate impacts materialize in the form of dangerous storms, flooding and deadly heat waves that disproportionately harm BIPOC and low-income residents,” Taves said, using a shorthand term for Black, indigenous people and people of color.

“To act in good faith for all Chicagoans, particularly those most vulnerable to the climate crisis, it is crucial that we align our finances with our pursuit of equity for all.”

Ald. Daniel LaSpata (1st) said divestment from fossil fuels clearly makes city investments more stable and more profitable.

“But even if those two points weren’t true, I would still be supporting this ordinance because we have a moral obligation. We have a values-based obligation as well as our fiduciary obligation to make sure that we are acting in line with the best interests of all Chicagoans,” he said.

“I cannot go into any elementary school in my ward if I’m not acting in ways that preserve the quality of life that those young people deserve.”