Trustees of Montgomery County’s employee pension funds should move a rapidly as possible to sell off stock in fossil fuel companies, under a resolution approved Tuesday by the County Council.
The measure, passed on an 8-to-1 vote, carries no legal weight. Its sponsor, Council President Roger Berliner (D-Potomac-Bethesda), originally introduced the issue last October as a proposed law, giving trustees five years to sell off the stocks. The bill included an “off-ramp” provision allowing for retention of the holdings if their sale hurt return on investment.
Fossil fuel stocks represent just $70 million of the county’s $4 billion pension portfolio. They include holdings in BP, Chevron, ExxonMobil and Mitsubishi. Berliner, backed by environmental groups, contended that the county had a moral obligation to shed stocks in companies that produce the oil, natural gas and coal that is accelerating climate change.
But protests from county retirees and the two bodies that oversee their pensions — the Employees’ Retirement System and the Consolidated Retiree Health Benefits Trust — scuttled the bill. Their representatives said they shared the council’s concern about climate change but called the bill an unwarranted interference in their fiduciary obligation to maximize returns. They also cited existing policies directing fund managers to seek out socially responsible investments.
Most other localities that have approved fossil fuel divestment have done so through resolutions. That includes the District, which has sold off about $20 million in stock over the last couple of years. Minneapolis, Seattle, San Francisco and Portland, Ore., have also approved similar measures.
Berliner said Tuesday that he was “pushing the outside of the envelope” by pressing for a law. But he contended that the resolution, which calls for the board to report annually on divestment efforts, “ratchets up the pressure” to move on the issue.
“I think it will encourage them by virtue of the reports they must file to really seriously be looking at this,” said Berliner, who announced recently that he had instructed his own financial adviser to get him out of mutual funds with fossil fuel stocks.
The lone dissenting vote was cast by council member Nancy Floreen (D-At-Large).
In a statement, 350MoCo, the local affiliate of a grass-roots group that has lobbied governments and private institutions to invest, said Tuesday that while it would have preferred a law, the council took a positive step.
“We are hopeful that this clear statement of intent and values by the Council will begin the process of moving Montgomery County towards fossil free investment,” the group said.
The number 350 represents the level of atmospheric carbon dioxide that many scientists say the planet must reach to avoid the worst consequences of climate change. The level is now an estimated 400 parts per million.