It’s been a tough winter in Maine. While the lack of snow and ice has been hard on the winter recreation industry, storms with high winds have caused unprecedented damage, particularly along our coastline. The effects of our changing climate are already having a big impact, and yet while there are calls for action (see “Maine Won’t Wait,” the Maine Climate Action Plan adopted in 2020 and currently under revision), in many ways it’s business as usual.

In 2021, in recognition of the climate crisis, the Maine Legislature passed a law requiring the state’s public pension fund, the Maine Public Employees Retirement System (MainePERS) to divest its holdings in fossil fuel companies by 2026. This law recognizes the urgency of acting to limit the consequences of climate change. However, we have come to learn that not only will MainePERS not meet the 2026 target date, they will not even be making substantial progress in that direction.

This past week, I attended a MainePERS briefing with the Maine Legislature’s Committee on Labor and Housing at which CEO Rebecca Wyke and Chief Investment Officer James Bennett explained that the lack of progress is because of their fiduciary responsibility to beneficiaries. That fiduciary responsibility is viewed by MainePERS as a green light to proceed as usual even though they have been given data showing alternative, fossil fuel-free investments are outperforming the fossil fuel returns in their public equity investments.  The problem it seems is that MainePERS relies on investment managers outside of Maine who make the investment decisions and that Maine’s fund is too small to dictate what these managers invest in, putting MainePERS in the position of being a follower.

As a retired state worker, I am a beneficiary of MainePERS and appreciate the work they do on behalf of my pension. However, I feel like it’s a case of doing a great job housekeeping while there’s a fire raging out in the yard.  I have been a member of Third Act Maine and participate with a coalition of groups known as Divest Maine. We recognize the need to act now to avoid the worst effects of climate change.

Several of us from the group met with Dr. Wyke and Mike Colleran, chief operating officer and general counsel, last month. We provided them with data on performance of fossil fuel-free alternatives showing that such alternatives have outperformed fossil fuels and that divestment is in keeping with their fiduciary responsibility. We got no response other than an assurance that our information would be shared with the board of trustees. A few of us attended the March board meeting. While Dr. Wyke did mention the meeting we had and our information that she passed along to board members, not one board member made comment, or asked a question. It was business as usual.

Maine’s Climate Action Plan is titled “Maine Won’t Wait” and yet, when it comes to comes to the bigger picture of moving away from fossil fuels, the response is that we are too small to be leaders; we are followers. I disagree.

MainePERS’ most recent divestment report to the Legislature lists its fossil fuel exposure to be greater than $1.2 billion, which is 6.5% of its portfolio. While it might be a small amount compared to other states’ public pension funds, it is not insignificant. Surely there are other investment managers willing to put those funds to work without exposure to fossil fuels.

To change our trajectory on climate change impacts, it will take bold action, not the kind of inaction displayed by MainePERS leadership, including its board of trustees, this past week. I ask the leadership at MainePERS to look to our state motto of “Dirigo” (I lead) and reconsider its strategy with respect to climate change.

Copy the Story Link