EPA officers are calling for fossil gas shares to be faraway from their retirement plans

This article was originally published on Labor Notes.

Not so long ago, environmental protection officials battled the Trump administration’s many attempts to harm both their agency’s mission and their rights in the workplace.

Under Trump, the EPA shortened the terms of office of union officials, reduced the ability to lodge complaints, and took away office, meeting and storage space. Now that most of those changes have been rolled back and the Trump era is behind them, EPA staff have begun working toward another goal: to divest their state pension investment program – the world’s largest defined contribution plan – from fossil fuel stocks.

“This is very important to us for EPO employees,” said Nicole Cantello, EPO attorney and president of Government Employees (AFGE) Local 704.

EPA staff issue and enforce regulations, grant grants, conduct research and education, and provide technical assistance with environmental remediation. They are probably more aware of the urgency of the climate crisis than most workers as they collect greenhouse gas data, regulate vehicle emissions and educate the public on the issue.

Even limiting global warming to 1.5 degrees Celsius above pre-industrial levels – the goal of the 2015 Paris Climate Agreement – will translate into heat waves, more droughts, more severe cyclones and floods, an increase in the number of heat waves, according to a seminal UN report from 2018 Sea levels, damage to ecosystems, lower crop yields, deforestation and other harmful consequences.

An increase of 2 degrees or more is far more devastating.

No wonder, then, that EPO staff are not happy, as Cantello put it, “having to invest in instruments that have fossil fuels and” [greenhouse gas] Emissions associated with them. “

Federal pension fund

You are, of course, not the only one on the pension plan. The Thrift Savings Plan, a group of funds similar to a 401 (k), manages $ 735 billion in investments for 6 million federal employees and military personnel.

About $ 442 billion of this is in index funds that track collections of stocks and bonds; the rest is US Treasury bonds.

The TSP is one of three parts of the Federal Employees Retirement System, which replaced the previous federal pension system in the mid-1980s. The government pays contributions of up to 5 percent of the workers’ basic salaries.

TSP investments are not disclosed publicly, so there is no way of knowing exactly how much is in fossil fuels. But “if the TSP invests in the same way as other pension plans, it’s very likely that it will be between 2 and 4 percent,” said Richard Brooks, climate finance director for the environmental nonprofit Stand, who supported the divestment campaign. That’s about $ 10 to $ 20 billion.

Money is lost

Proponents of change such as Cantello point out that fossil fuel stocks are losing money for TSP members – suggesting that the fund has a financial responsibility to workers in addition to the environmental responsibility for choosing to sell.

The fund’s board of directors is required by law to act in the best financial interests of TSP members and has been cautious about political interference in its decisions. In 2020, the Trump administration successfully urged the Board of Directors to postpone a switch of some TSP investments into an index fund that includes some Chinese companies, highlighting this danger.

But “this is our investment money, and we have the right to say … the people we hire effectively to manage it should listen to us,” said Margaret McCauley, EPA environmental engineer and a member of Government Employees (AFGE) Local 1110 from Seattle. In her job, she writes permits for activities such as rainfall runoff from industrial sites.

The TSP’s funds are primarily managed by BlackRock, the world’s largest asset manager and major fossil fuel investor with approximately $ 100 billion in coal, oil and gas as of last September. The company manages between 80 and 90 percent of the four TSP funds that are invested in private companies (the other is government bonds).

Even Black Rock is moving its non-TSP funds out of the fossil fuel sector because dirty energy has fared worse than the rest of the market in recent years. The decision on TSP funds, however, rests in the hands of the five-member Federal Retirement Thrift Investment Board.

“This is about maximizing federal employee pensions and upholding our commitment to the Paris Climate Agreement, which all the nations of the world have agreed to,” said Jonathan Reston, an EPA official who requested a pseudonym.

The 2015 Paris Climate Agreement is a legally binding treaty signed by almost every country in the world that obliges nations to bring the world to a temperature rise of 1.5 ° C.

The Obama administration signed it. The Trump administration withdrew the US from it last November – the earliest date it could legally do so. The Biden government re-entered in its earliest days.

“Practice being a Union”

At least three concurrent efforts, each with a slightly different take on the disposition and use of the TSP’s power as a major pension fund, have contributed to this latest round of organizing federal employees around their retirement portfolios. While directed by EPA staff, they also participate in staff from the Department of Energy, the National Oceanic and Atmospheric Administration, and the Army Corps of Engineers.

Most of these efforts are just beginning, but they add to a growing push that seems to be having an impact: you have convinced the Government Employees (AFGE) union to support them. And President Biden recently ordered an investigation into the matter.

McCauley initiated an attempt when she organized an open letter last summer asking for an “environmentally and socially responsible” investment option; 125 federal employees have registered.

She said the work was challenging because “the people I work with are still really scared” after being “demoralized and beaten by the last four years.”

McCauley sees the divestment campaign, however, as a kind of practice run for union activities that are more centered on the shop floor.

“Things like that are a way of practicing being a union, being united, having a voice,” she said, “on things that are a little less uncomfortable than, ‘We really need to get rid of this manager.'”

Multiple ways to win

Cantello started another divestment initiative; it started a few years ago but has only recently been restarted.

She has worked with AFGE members from other agencies, EPA executives, and pension fund divestment experts to move the agenda forward.

You have identified several avenues for sale. One way is to ask President Biden to support the five-member board of directors; One seat is currently vacant, the terms of office of the other four members have expired.

Another option would be to pass the RESPOND law. This legislation would require the board to set up a climate advisory body and make plans to sell if the board determines that this will benefit the participants financially. Even if not, the board would have to offer a divested plan for those enrolled to choose. Merkley had offered similar laws in 2018.

Beyond the EPA

Jonathan Reston is among those trying to reach out to employees and retirees of multiple federal agencies across the country. “We’re a group of a dozen or so regular people who meet regularly,” he said. Working on the divestment campaign was his first significant union engagement, although he has been a member for seven or eight years.

Workers hand out at least two petitions. One calls for investing only in “funds that do not contribute to climate change or deforestation” and instructing BlackRock to “support shareholder resolutions to curb climate change and deforestation”. At the time of this writing, it had been signed by 567 workers in at least 51 different federal agencies.

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