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.