US court quashes divestment challenge against New York pension funds
A US court has backed three New York City Pension Funds’ decision to divest from fossil fuels, dismissing a case put forward by conservative members
While pension funds are often urged by climate campaigners to divest from fossil fuels, this case marked the opposite: scheme members attempted to challenge a decision to divest from fossil fuels.
New York City Employees Retirement System, the Teachers’ Retirement System of the City of New York and the Board of Education Retirement System of the City of New York had voted to divest from publicly listed fossil fuel companies three years ago.
Four scheme members, Wayne Wong, Jeriann Jaloza and Jennifer DiMeglia and Jatania Mota had taken to pension funds to court, arguing that the decision to divest from fossil fuels amounted to mismanagement and poorly investing their pension savings. The plaintiffs had the backing of anti-ESG campaign group Americans for Fair Treatment. They were represented by Eugene Scalia, Donald Trump’s former Labor secretary and son of the conservative judge Antonin Scalia.
But the court dismissed these challenges by stating that they did not suffer a detrimental impact from the divestment, due to the pension funds in question being defined benefit plans.
The plaintiffs challenged this assertion by stressing that a decision to divest impacted the financial health of their pension plans. But the judge Andrea Masley dismissed this as “speculative.”
New York City Comptroller Brad Lander welcomed the decision as “ a big win for common-sense responsible investing, New York City’s municipal workers and retirees, and for the future of the City and the planet”
The three pension funds have completed their divestments from fossil fuels in 2022 and are currently in the process of implementing net zero plans across their wider portfolios.
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