Montgomery County Council President Roger Berliner said Monday his proposed legislation that would have called for the county’s retiree pension fund to divest its fossil fuel company holdings will be changed to a resolution encouraging divestment.
“A resolution will create a context where we can make some positive movement on this issue,” Berliner said during his weekly Monday morning press conference. “I think there will be much broader support from colleagues for this approach.”
Berliner introduced the bill in October with environmental goals in mind and to send a message that the county is selecting businesses to invest in based on how they take care of the planet.
The passage of the bill would have marked the first time the council would have restricted what type of company the pension fund could invest in. The bill was initially met with resistance; the county’s Board of Investment Trustees, which manages the approximately $4 billion fund, said it was required by law to maximize the fund’s returns in order to pay retirees’ pensions. The fund includes about $70 million in fossil fuel company holdings.
Meanwhile, environmental groups as the Sierra Club and the Chesapeake Climate Action Network as well as the local group 350 MoCo, testified in support of the bill in December. They said divesting from the fossil fuel companies could promote behavioral change that will prompt those companies to be more environmentally friendly.
Berliner said the proposed resolution would have the support of County Executive Ike Leggett and Gino Renne, the chair of the Board of Investment Trustees and president of the local employee union MCGEO Local 1994. Berliner said the resolution is expected to be introduced to the council May 2.
The resolution wouldn’t force the divestment, but would encourage the board to stop investing in fossil fuels.
“The Board of Investment Trustees’ fiduciary obligation trumps everything else—that’s in state law, that’s in federal law,” Berliner said. “We can encourage them to do this and hold them accountable by holding oversight hearings in which we ask them to come forward and every year ask them, ‘What have you done to advance this objective?’ “
On Friday, Leggett sent the council a memo requesting a resolution replace the proposed legislation and cited the board’s requirement under county law to act “only in the best interest” of those who have money in the fund and their beneficiaries.
“The right response for our county is to continue to strengthen our own climate initiatives and press for adoption of federal measures that will make a difference to the planet,” he wrote. “It is not to take actions that would have no practical effect and could harm the investment returns of our retirement funds.”