Advocates Push State Pension Fund to Divest From Fossil Fuel Companies

A banner at a Milwaukee demonstration in 2019 to call attention to climate change. A group of Wisconsin Retirement System members have been campaigning to persuade the State of Wisconsin Investment Board to get out of its fossil-fuel holdings, asserting they are risky investments in light of climate change. (Isiah Holmes | Wisconsin Examiner)

A retired technical college teacher in Milwaukee, Anne Steinberg says she appreciates the pension she gets every month and the state agency that manages the pension fund assets.

But she also believes the State of Wisconsin Investment Board (SWIB) could do much better if it made one big change: getting out of any fossil fuel-related investments.

“They’re investing for the long term, and we don’t think fossil fuels are good for the long term,” Steinberg says.

A few years ago, she and a group of other Wisconsin State Retirement System members began a project to learn more about SWIB’s fossil fuel holdings. Over the last year they’ve been trying to persuade the board’s investment managers to divest them.

So far they’ve received a polite response and held some conversations with top SWIB officials, but no indication that the agency plans to change its investment policies. So this month their organization, Climate Safe Pensions Wisconsin, began airing radio ads to garner broader attention for the campaign.

Concern about climate change originally led Steinberg, a retired Milwaukee Area Technical College printing and publishing instructor, to wonder if her personal savings might be supporting climate-harming industries. During a conversation with a friend, “we realized that a lot of our money was in the pension system,” Steinberg says. “We didn’t know how that was invested.”

While she began her research out of an ethical principle — not wanting to be making money from industries she felt were harming the planet — she found another reason as well: financial prudence.

“As I looked at it more and more, I realized there was significant risk in investing in fossil fuels,” Steinberg says. “The more I learned, the more concerned I became.”

As their informal group grew, they connected with Climate Safe Pensions, a national network that works to reduce pension fund holdings in fossil fuels. The Wisconsin advocates started an online petition urging SWIB to begin divesting its fossil fuel holdings.

The national network helped with funding and executing the recording for the radio ad, Steinberg says, while the Wisconsin activists wrote the copy.

“Connect the dots,” says the ad announcer. “Would you dip into your retirement savings to make a loan to climate-polluting oil, coal and gas companies? Well, you already have if you’re a member of Wisconsin’s public employee retirement system.” The ad directs listeners to the website for the Wisconsin group’s petition.

The radio spot is the biggest splash the group has made since first going public a year ago. At the SWIB quarterly meeting March 28, 2023, members of Climate Safe Wisconsin wanted to present 500 signed petitions to board members and staff but were denied because SWIB officials told them the agency is not required to allow public comments at its meetings and doesn’t do so.

Instead, the activists held an event outside the SWIB meeting and left copies of the signed petitions for SWIB’s board chair and its executive director, Steinberg says.

Two months later, on May 24, 2023, Steinberg and another member, Pete Knotek, a retired Racine school speech pathologist, met with four SWIB staff members, including Rochelle Klaskin, the deputy executive director, and Sara Chandler, SWIB’s chief legal counsel. Steinberg and Knotek brought with them a table that showed nearly 4.8% of SWIB’s holdings as of 2021 were in businesses connected to fossil fuels.

The data for the table came from SWIB’s 2021 annual report. The information was analyzed for the Wisconsin group by Stand.earth, a U.S.-Canadian organization that engages in research and activism on environmental justice and climate change.

Steinberg says the SWIB officials confirmed the accuracy of the calculations and said the agency did not intend to reduce its fossil fuel investments.

The May 24 meeting ran for more than an hour. “One of the points we made when we first arrived at that meeting was how well-run and managed the Wisconsin Retirement System is,” Knotek says. “We came as pensioners who appreciate the work of SWIB.”

Less than 5% of SWIB assets are invested in fossil fuel-related holdings, but that’s only part of the picture, Knotek says.

“While the percentage might appear small, the actual [amount of] dollars are huge,” he says — more than $8 billion as of the 2021 numbers.

According to Steinberg those calculations don’t include money in private equity, where there’s a delay in reporting what the investments are for and the actual recipients might not be publicly disclosed. “We can’t know exactly how much of our retirement funds are in fossil fuels,” she says.

“Divestment of fossil fuels is a very responsible fiduciary act,” Knotek says. “We’re concerned that the fossil fuel industry is a volatile industry, with a risk of stranded assets down the road as the transition to renewable energy accelerates. To us there’s no good reason to not have a plan to divest from fossil fuels.”

In two email messages to the Wisconsin Examiner, one in December and one on Friday, SWIB’s communications director, Shannon Gannon, said SWIB would have no comment on the radio spot, the Climate Safe Pension Wisconsin campaign or questions about SWIB’s consideration of climate change and related risks in its investment decisions.

“SWIB does not comment on investment strategy,” Gannon said in a Dec. 18 email message.

The group found an additional argument for their campaign in a study published in June 2023 by researchers at the University of Waterloo in Ontario, Canada. Comparing the actual returns SWIB received over a 10-year period with the theoretical results if the board had divested its fossil fuel holdings, the researchers calculated that failing to divest cost the Wisconsin portfolio $4.3 billion.

Since then Climate Safe Pensions Wisconsin members have been attending SWIB’s quarterly meetings to hear what the investment team says publicly about its work.

Steinberg says the conversations she and other group members have had with SWIB have been cordial but less informative than she would like.

“We want to hear that they’re considering climate risk,” she says. “They said, ‘Oh, we do look at that,’ but when we asked for examples, they just say, ‘We do it. We look at climate risk.’”

That’s not enough in her view. “Since they’re managing my money,” Steinberg says, “I have a right to hear why they are choosing [in invest in] all these fossil fuel companies.”

Wisconsin pension holders organize to push investment agency out of fossil fuels was originally published by Wisconsin Examiner.