Major Pension Funds Question Long-Term Outlook For Fossil Fuel Profits

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Leaders from some of the largest pension funds in the U.S. and the world are concerned about the future profitability of fossil fuel companies, and they have asked those companies to report on their plans for managing a long-term shift toward renewable energy.

Managers of 70 major pension funds, which together control about $3 trillion in investments, asked 45 of the world’s largest coal, oil, gas, and electric power companies to complete the profitability studies by spring.

The pension funds are concerned that, because large investments in fossil fuel exploration take decades to recoup, future legislation could limit production or regulate expensive pollution controls that will significantly cut profitability. “The scientific trajectory that we’re on is clearly in conflict” with the business strategy of the companies, Jack Ehnes, the head of the California’s State Teachers’ Retirement System, told the AP. “We’ve been pleasantly surprised by the seriousness” of some of the fossil fuel companies, who are “not just blowing us off,” a spokesman for the coalition that is coordinating the efforts told the AP. Thirty companies have sent preliminary responses, the spokesman said.

Article appearing courtesy Yale Environment 360.

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Yale Environment 360 is an online magazine offering opinion, analysis, reporting and debate on global environmental issues. We feature original articles by scientists, journalists, environmentalists, academics, policy makers, and business people, as well as multimedia content and a daily digest of major environmental news. Yale Environment 360 is published by the Yale School of Forestry & Environmental Studies and Yale University. We are funded in part by the Gordon and Betty Moore Foundation and by the John D. and Catherine T. MacArthur Foundation. The opinions and views expressed in Yale Environment 360 are those of the authors and not of the Yale School of Forestry & Environmental Studies or of Yale University.

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