Workers’ Money Can Help Save the Planet
By Jeff Johnson, past president of the Washington State Labor Council and co-president of Puget Sound Advocates for Retirement Action (PSARA)
From this union leader’s perspective, unions have a moral, economic, and member imperative to do everything we can to divest our pension funds from fossil fuels.
As part of the US labor delegation to the 2015 Paris climate talks, I had a front row seat in historic discussions happening inside the formal talks. I also attended profound and honest discussions happening in the shadow climate talks, conducted by civil society and environmental justice groups throughout Paris.
While the formal talks hinged on keeping global temperature rise below 2 degrees Celsius, the shadow talks revealed the magnitude and urgency of the crisis and its inextricable linkage to crises of wealth inequality and racism.
In spite of the aspirational goals of the Paris Climate Accord, the financial industry has invested nearly $7 trillion in the fossil fuel industry since 2016, including over $3 trillion invested in expanding this industry. Put simply, the banking industry and private equity firms are doubling down on financing climate destruction, human misery, and the loss of jobs.
There could not be a louder clarion call for unions to help address climate change. And we have the means to do so:
- Assets in US union pension funds are over $35 trillion dollars,
- About $6 trillion of these dollars are in public pension funds.
- Not one penny of these pension funds should be invested in destroying our planet and our members’ jobs.
When I studied finance in school, I remember learning the “prudent person” rule. This rule limits financial investments to those that a reasonable person would assume would provide a reasonable return and the preservation of capital. There is nothing prudent about investing in fossil fuels – as climate change worsens, fossil fuel assets will continue to decline in value and will eventually become stranded assets.
As the Labor Network for Sustainability has said for years: There are no jobs on a dead planet.
Our labor movement has the opportunity and means to invest in the well-being of our members and their children and grandchildren through socially responsible, equitable, and sustainable financial products that provide a reasonable return on our members’ money. For example, our pension funds could help build state/public banks that finance large-scale commercial and industrial building energy retrofits. Our pension funds could help build clean energy mass transit – and so many other useful investments!
As unions, we have the ability to provide for our members’ futures and help create millions of non-fossil-fuel jobs. We can start by taking an honest look at what lies behind the ledger sheet. This is what a prudent person and prudent union should do in a world of rapidly accelerating climate change.