Chicago, playing politics with pension funds.
The Chicago City Council on Wednesday voted to ban city investments in coal, oil and gas companies in an effort to combat climate change.
The measure was supported by Chicago Mayor Lori Lightfoot and Treasurer Melissa Conyears-Ervin, who manages investments for the city as well as its pension funds and oversees $9 billion in assets. The city plans to create a list of companies that are coal, oil, and gas-reserve owners, ranked by potential carbon emissions. The treasurer won’t invest any city funds and will divest securities or other obligations of the companies on the list, according to the ordinance.
The ordinance will not impact the current portfolio, according to an emailed statement from the treasurer’s office. Conyears-Ervin divested all holdings through maturities and sales related to fossil fuels over the last 18 months anticipating that the measure would pass, which added up to about $70 million. The ordinance intends to prevent future reinvestment, according to the statement…
Sectors move up and sectors move down, but that timing may not have been . . . ideal.
The Financial Times (Dec 30, 2021):
Oil and gas shares — knocked early in the pandemic and increasingly shunned by eco-conscious investors — have this year eclipsed the stock markets’ in-vogue environmental, social and governance-focused companies.
As of December 29, US giants Exxon and Chevron had added 48 per cent and 40 per cent respectively in 2021. The duo have helped power global energy equity funds past many of the hundreds of US and European sustainable funds as defined by Morningstar, a data provider.
The iShares MSCI global energy producers exchange-traded fund is up 37 per cent to December 29, outperforming the largest US ESG fund — the $31.8bn Parnassus Core Equity fund – which is up 28 per cent. The largest iShares ESG fund run by giant fund manager BlackRock has also trailed, up 30 per cent.
Meanwhile, I’ll just repeat one line from a newspaper report from which I quoted this morning.
Volodymyr Zelensky has called on energy producing countries to step up their output in order to prevent Russia from using its oil and gas to “blackmail” European nations.
Chicago is a “sister city” of Kyiv, I see.
Not so much, I reckon.