Strategy

The Minnesota Divestment Coalition is mobilizing to protect our pensions from risky investments in fossil fuels. Other countries around the world, as well as many corporations, institutions, and government bodies here in the US, are dumping fossil fuel stocks as they continue to underperform. The financial forecast for carbon industries is bleak. We believe it’s time for Minnesota to divest.

Fossil fuel investments are incredibly risky and increasingly volatile. The fossil fuel sector continues to shrink. The S&P 500 Energy Index has underperformed the market in recent years, translating to significant losses in Minnesota pension funds. The volatility of these investments was illustrated dramatically when oil prices fell to negative levels in early 2020. As of August 2020, the 5- year performance of the energy index was down 49% while the S&P 500 was up 53%… There is little hope that the energy index will return to its former profitability.

Four elected officials make up the State Board of Investments: Governor Tim Walz, Secretary of State Steve Simon, State Auditor Julie Blaha, and Attorney General Keith Ellison. They have the ability to act to protect our pensions from risky and unethical fossil fuel investments

Suggested Actions for SBI Board Members to Take

Here is a list of actions we want the State Board of Investment to take. These actions make up a step-by-step plan to study the financial risk of continuing to invest in fossil fuels.

1. Put in place a moratorium on new investments in the Carbon Underground 200 companies. (https://fossilfreefunds.org/carbon-underground-200)
2. Direct the Executive Director of the State Board of Investment to conduct a literature review and investment assessment of divesting from the Carbon Underground 200 companies and report back to the Board within six months of the Board’s direction. This study should:
   • Assess the financial risk of:
     • Catastrophic climate change
     • Stranded fossil fuel industry assets
     • Necessary government regulation intended to mitigate climate change
     • Litigation against the Carbon Underground 200 companies for climate-change related losses
   • Be informed by the experience of other jurisdictions and entities that have divested or are in the process of divesting from the Carbon Underground 200 companies (e.g. New York City and the Rockefeller Foundation)
   • Compare the returns on Carbon Underground 200 divested portfolios with traditional investment portfolios.
3. Return to the State Board of Investment at its first meeting following the report with three scenarios, including expected rates of return, risk factors, and potential externalities for:
   • Immediate divestment from the Carbon Underground 200 companies
   • Gradual divestment from the Carbon Underground 200 companies over five years
   • Business as usual

To find out how you can get involved, click here.