I am a surgical technologist at one of the country’s most prestigious hospitals – Memorial Sloan Kettering Cancer Center in NYC. The hospital consistently ranks either number 1 or 2 nationally for cancer care in USNWR.
In September 2019, I organized a fossil fuel pension plan divestment campaign; over 20 surgeons, doctors, nurses and other staff signed on to demand our pensions be divested from fossil fuels.
I presumed that an influential medical institution such as ours would have no choice but to recognize the well-documented dangers to global public health posed by the climate crisis. Indeed, the world’s leading medical and science institutions, such as the American, British and Canadian Medical Associations, and the National Academy of Medicine, call for strong climate action, including divestment, for the sake of public health. I presumed that our hospital would apply the same ethical parameters it expects of its doctors to its own investment practices: “First, do no Harm”. You know, ‘cause we’re a…hospital.
I was wrong. Our hospital rejected our demands to divest. Multiple times.
In their rejections, they not once referenced the health impacts of climate change which we voluminously referenced. Their multiple responses contained not a single word about health. You know, ‘cause we’re a..hospital.
Want to know the one and only, single reason cited by our hospital’s investment director?The legal restrictions placed on him by the Employee Retirement Investment Security Act of 1974 (ERISA) – the set of federal regulations and oversight of private pension plans.
The Trump Administration amended ERISA, requiring pension fund managers to consider one thing: ‘pecuniary factors’ (dollars), exclusively in their investment decisions. This created a de-facto ban on managers considering ESG considerations (Environment, Social and Governance). The ERISA changes were seen as a deliberate defense of the oil and gas industries as the calls for fossil fuel divestment were growing.
Pension fund managers across the country cite ERISA as a prohibition against fossil fuel divestment.
But this may change soon.
President Biden’s “Executive Order on Climate Related Financial Risk”, issued on May 20, 2021, among other provisions, directs the Secretary of Labor, Marty Walsh, to consider revising, suspending, or rescinding the Trump-era ERISA limitations on ESG. Rescinding the ESG restrictions would strip private pension managers of the ‘legal’ excuse to avoid divesting. Walsh’s recommendations are due by September 13 and you can find the full executive order here. .
(NOTE: The Biden administration has stated it will not enforce the Trump ESG restrictions on the Federal level, but private entities may still cite the law, so it’s technically still on the books.)
It’s not yet clear if the Biden Administration will in fact ‘rescind’ the ERISA ESG limitations, but activists are putting pressure on them to do so: On August 10, 2021, a group of over 100 leading international, national and local climate and environmental justice organizations with Stop the Money Pipeline coalition sent a letter of expectation to the Biden Administration, detailing their specific expectations for the upcoming policy recommendations, including the ERISA review.
The expectations include: a ban on new permits; ‘net-zero’ as a condition for companies’ inclusion in government programs; rejection of “carbon-capture” investments with ‘net-zero’ clearly defined; a direct lending program with zero interest for green recovery programs; prioritizing investments in black, brown and indigenous communities who have suffered disproportionately; and more.
The full letter of expectation to President Biden from the Stop The Money Pipeline coalition, here: https://stopthemoneypipeline.com/eosec2expectations/
As a divestment activist, I’m waiting with baited breath – as is the divestment movement as a whole. If the Biden administration reverses Trump’s ESG restrictions on private pension plans, investment managers like the one at our hospital, across the country, will have ‘one less a leg to stand on’ in continuing to reject fossil fuel divestment.
This story was also published here.