Di­vest­ment is a costly, empty ges­ture

Baltimore Sun - - MARYLAND VOICES - Jeff Eshel­man, Wash­ing­ton, D.C. The writer is a se­nior vice pres­i­dent of the In­de­pen­dent Petroleum As­so­ci­a­tion of Amer­ica.

A re­cent ed­i­to­rial (“An at­mos­phere of ne­glect,” Oct. 20) ig­nores the high cost and in­ef­fec­tive­ness of fos­sil fuel di­vest­ment.

Re­search finds the trans­ac­tion and man­age­ment fees related to di­vest­ment can rob en­dow­ment funds of as much as12 per­cent of their to­tal value over a 20-year time frame. Ac­cord­ing to the Cal­i­for­nia State Teach­ers’ Re­tire­ment Sys­tem, “Di­vest­ment bears the risk of ad­versely af­fect­ing an in­vest­ment port­fo­lio and sev­ers any chance to ad­vance pos­i­tive change through share­holder ad­vo­cacy.” The Ver­mont Trea­sury also found di­vest­ment would cost their state pen­sion funds $10 mil­lion per year in lost re­turns. Mean­while, di­vest­ment has no tan­gi­ble im­pact on the en­vi­ron­ment, in­clud­ing no ef­fect on tar­geted com­pa­nies, their mar­ket value or prac­tices.

Mary­land should fo­cus on poli­cies that ac­tu­ally sup­port the en­vi­ron­ment, not empty po­lit­i­cal ges­tures like di­vest­ment. Law­mak­ers should up­hold their fidu­ciary re­spon­si­bil­ity and make re­spon­si­ble choices that ben­e­fit the pen­sion funds our hard-work­ing state em­ploy­ees rely on.

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