(Bloomberg) — The Chicago City Council on Wednesday voted to ban city investments in coal, oil and gas companies in an effort to combat climate change.
The measure was supported by Chicago Mayor Lori Lightfoot and Treasurer Melissa Conyears-Ervin, who manages investments for the city as well as its pension funds and oversees $9 billion in assets. The city plans to create a list of companies that are coal, oil, and gas-reserve owners, ranked by potential carbon emissions. The treasurer won’t invest any city funds and will divest securities or other obligations of the companies on the list, according to the ordinance.
The ordinance will not impact the current portfolio, according to an emailed statement from the treasurer’s office. Conyears-Ervin divested all holdings through maturities and sales related to fossil fuels over the last 18 months anticipating that the measure would pass, which added up to about $70 million. The ordinance intends to prevent future reinvestment, according to the statement.
“The consequences of climate change stand to make Chicago a less desirable place to live and work, negatively affecting the fiscal and social health of the city,” according to the ordinance. Divestment will take place “as soon as practicable or in accordance with the written investment policy.”
The nation’s third-most populous city is the latest government to take steps to wield its investment policy to fight climate change. Thirty-eight U.S. cities have divested from fossil fuels companies, according to the ordinance. Maine last year enacted a law requiring divestment from fossil fuels, the first U.S. state to do so.
Public pension plans and college endowments have already stepped up efforts to address their investments in fossil fuels to fight climate change.
In October, New York City’s pension funds pledged to reach net-zero greenhouse gas emissions across investment portfolios by 2040. That followed the New York State Common Retirement Fund, which announced in late 2020 that it may divest from the riskiest oil and gas companies by 2025.
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