After many months of COVID, amid a recession, and the eruption of nationwide protests over Minneapolis Police’s slaying of George Floyd, the Minnesota State Board of Investments passed a hard-fought resolution to divest the state’s public pension funds from companies that make more than 25 percent of their revenue from thermal coal mining.
The resolution, passed Friday, instructs chief investment officer Mansco Perry and his staff to identify companies for the chopping block before the board’s August 26 meeting. Those stocks must be sold off "in a prudent and expeditious manner, but no later than December 31, 2020," the resolution says.
Retiree and youth activists alike have been pushing for divestment from fossil fuels for years. As of March, Minnesota's public employee pension funds had $4 billion invested in fossil fuel holdings.
As rationale for cutting coal, the SBI said coal companies face “material declining market values and risks of stranded assets due to demand for more cost effective and efficient forms of energy production.” A number of other large public pension plans across the nation have recently removed coal companies from their investment portfolios for the same reason.
The SBI consists of Gov. Tim Walz, Attorney General Keith Ellison, Sec. of State Steve Simon, and State Auditor Julie Blaha.
Blaha says recently Walz has been completely absorbed by response to COVID-19 and Floyd demonstrations; Ellison has been fighting pandemic profiteering, enforcing the stay-at-home order, and, most recently, taking over the prosecution of Derek Chauvin and three other ex-cops involved in Floyd’s death; and Simon has been preparing for a pandemic-year presidential election.
Blaha says her role is to ensure the SBI's efforts to shield the state’s investments against climate risks don't get lost in the shuffle.
“This is simply the right choice in these times. But like a lot of right choices, it has benefits beyond just the finances. It’s kind of one of those win-win situations,” Blaha says, crediting Ellison with putting the SBI’s instruction in the form of a resolution so the public can assess its decision.
Emily Moore, a retired Minnesota Pollution Control Agency chemist and climate change activist, says the SBI’s next step should be evaluating the climate-related financial risks of all oil and gas companies in its portfolio.
“Oil and gas are no longer providing the service they have served in providing stability in investment portfolios. They always paid dividends, and now they’re too volatile,” she says. “Canadian tar sands and coal are at this point stranded assets.”
Grace Bassekle, a 2020 graduate of Champlin Park High School and Youth Climate Strike organizer, says the pandemic gave her much time to reflect on the time and energy she and fellow students spent lobbying the SBI to divest from fossil fuels. For a long time, it’d seemed like board members would never budge, and their efforts would go to waste.
“I’m very shocked,” Bassekle says of Friday’s resolution. “The fact that they’re taking this step to divest from coal is really, really amazing. I’d like to give a round of applause to the State Board of Investment members because it is a huge, big step and I only hope for them to continue on and fully divest from fossil fuels.”
In recent days Bassekle has been helping her friends organize a Friday protest for Floyd, attending a number of demonstrations, and volunteering with efforts to clean up Lake Street following riots and arson.
The SBI’s decision on coal has been a spark of encouragement through all the pain and unrest, she says.
“It has lifted me up, honestly, because sometimes fighting for the right cause can be very, very tiring when it feels like these politicians don’t really hear us. But it is nice to know that they are listening and they understand that investing in fossil fuels is not sustainable, not safe, and it is a financial risk.”
Correction: A previous version of this article incorrectly stated Auditor Julie Blaha was an accountant. She was a teacher.