TRENTON – The Senate Environment and Energy Committee advanced legislation sponsored by Senator Bob Smith that would prohibit the investment of state retirement funds in any of the top 200 companies that hold the largest carbon content fossil fuel reserves.
“This legislation is about aligning our state’s investments with our climate goals,” said the Chair of the Senate Environment and Energy Committee, Senator Bob Smith (D-Middlesex/Somerset). “As it stands, we pour millions into the advancement of clean energy while investing our retirement funds in the very companies that worsen climate change. By requiring divestment, provided that doing so would not threaten the financial solvency of our retirement funds, we will send a message to these companies about what New Jersey values are, and where they should be focusing their future energy investments.”
The bill, S-198, would require divestment from coal companies to be completed within two years, and from all other fossil fuel companies within one year. Senator Smith is hopeful that fossil fuel companies will feel the public pressure to convert their business model to the proliferation of renewable energy sources.
The financial management firm BlackRock concluded in a 2021 study conducted to advise New York City’s public retirement funds with regard to divestment from fossil fuel companies that investment funds have experienced little to no negative financial impacts from such divestments. They found that fossil fuel stocks have already been underperforming, and are projected to continue doing so in the face of increasing regulatory and market risks.
The bill was advanced in a 3-2 vote.