Boston Mayor Michelle Wu signed an ordinance on Monday to divest $65 million in city investments from companies that profit off fossil fuels, sending a message as state officials get ready to debate how it invests its pension fund and hopefully, she said, setting an example for cities around the country.
The ordinance was the first signed by the new mayor, and she was joined at City Hall to celebrate the new investment policy by members of the city council, U.S. Sen. Ed Markey, environmentalist Bill McKibben and others.
The city council passed the measure that had been sponsored by Wu, as well as Councilors Lydia Edwards and Matt O'Malley, last Wednesday, a day after Wu took the oath of the office to become Boston's new mayor. The ordinance prohibits city funds from being invested in the stocks, securities, or other obligations of any company which derives more than 15 percent of its revenue from fossil fuels, tobacco products, or prison facilities.
Wu and O'Malley recalled the years of work it took to reach the point of divestment, starting with a resolution that the pair filed during Wu's first year on the council in 2014. Wu said that was also the year her oldest son Blaise was born, and scientists reported it being the hottest year on record. New records have been set every year since, she said.
"We're moving quickly to make sure that Boston will set the tone for what's possible for that greatest greatest future for all of our kids," Wu said.
Boston joins a growing list of municipalities around the country choosing to divest from fossil fuels, as well as states like Maine and New York.
O'Malley, who is retiring from the council after this term, said not only is divestment an appropriate value statement, but one that makes financial sense for the city given that the Dow Jones Sustainability Index routinely outperforms the Dow Jones Industrial Average.
"This is a really big day for this city, and mark my words, other cities will follow suit," O'Malley said.
The new ordinance requires full divestment from targeted industries by 2025, though the policy does not apply to the city's pension fund, which is governed by state laws. The treasurer of Boston also manages a number of trusts outside the pension fund, including one that finances other post-employment benefits like health care and life insurance.
The mayor's office could not be reached for further explanation, but The Boston Globe reported that the city controls about $1.3 billion of its roughly $2 billion in total investments, including pension funds.
Wu, during her campaign for mayor, called for a local "Green New Deal," and the co-author of the "Green New Deal" proposal in Congress, U.S. Sen. Ed Markey, joined her at City Hall on Monday to celebrate.
Markey called the public officials and activists who fought for divestment "climate Paul Reveres," and described Boston Harbor as part of the second fastest warming body of water - the Gulf of Maine - on the planet.
"Boston is at the center of this dangerous science experiment, which is taking place on this planet with the fossil fuel companies using us as the experiment," Markey said. "What the mayor is signing today is a declaration of independence from the oil, gas and coal industry."
Boston's push to divest from fossil fuel companies comes as Treasurer Deborah Goldberg is getting ready to encourage state pension fund managers to take a different approach to using taxpayers dollars as leverage to force companies to be environmentally responsible.
Goldberg will ask the Pension Reserve Investment Management Board in February to approve new rules directing the fund to vote against directors at companies whose policies are not aligned with achieving the goals of the Paris Climate Agreement, which would be to limit global warming to 1.5 degrees Celsius by 2050.
The state pension fund controls $95.7 billion in investments spread across more than 11,000 public companies. Instead of divesting from companies built on fossil fuels, Goldberg believes it's better to try to influence corporate policy from the inside.
"The pension fund invests billions of dollars in publicly-traded companies, and we want to do all we can to ensure these organizations are following best practices by affirming the science and causes of climate change," Goldberg said in a statement last week.
"It is critical that we forward thinking in building and implementing a comprehensive (environmental, social and corporate governance) framework that will have a positive long-term impact on our changing climate," Goldberg continued.
Wu in the past has supported legislation on Beacon Hill that would have required the divestment of pension funds from fossil fuel companies, but she made no such demands on the Legislature on Monday, when she was focused on the city's new policy.
Edwards, an East Boston Democrat who is running for a state Senate seat, said the ordinance signed by Wu finally aligns the messaging from public officials with the city's finances.
"We have talked about being greener. We've talked about being cleaner. But where our money was being invested didn't line up with that," Edwards said. "Today, the two are walking together -- our money, our values. We are making sure that we are truly investing in the most fiscally responsible way, but also in a way that provides for a future for our children's children's children."
Others who spoke in support of the new ordinance included McKibben, a founder of 350.org and a leader in the divestment movement; Rev. Mariama White-Hammond, the city's chief of environment, energy, and open space; and Rev. Vernon Walker, of the Sierra Club.
"Today, Boston has a claim, at least for a day, to being the greenest city in the country," McKibben said.