Port Moody will look to move some of its investments into newly-created fossil fuel free funds managed by the Municipal Finance Authority (MFA).
But wholly divesting the city of all investments with links to companies involved with fossil fuels is more complicated than it first seems, says the MFA’s CEO, Peter Urbanc.
In April, 2018, then Coun. Rob Vagramov successfully put forth several motions to steer city money away from the fossil fuel industry.
Urbanc said that’s easier said than done.
At a recent presentation to council’s finance committee, he said many members of the MFA, which manages about $4 billion in municipal investments, are interested in similar divestments, but few have followed through. He said a fossil fuel free short term bond fund that launched last spring has attracted only $78 million. A new fossil fuel free equity fund with a greater potential return is expected to launch next year.
Urbanc said corporate ties to fossil fuel companies are often interwoven. For instance, insurance companies or banks that are part of an investment portfolio can have some of their own investments in an energy or fossil fuel company, rendering them ineligible for inclusion in an ethical fund.
Urbanc said standardized definitions for what is considered socially responsible investing haven’t yet been set.
“People’s opinions vary dramatically around these things,” he said. “So they have to pick their own standards.”
Urbanc said steering large pools of money away from fossil fuels can have a greater impact than time-consuming advocacy initiatives.
“Council has to decide what is your moral compass and what is important to you.”
Coun. Diana Dilworth said it’s important the city be transparent about where it invests taxpayers’ money.
“The debate is not whether this is the right thing, but when and how much.”
Paul Rockwood, Port Moody’s general manager of finance and technology, said the city has to “walk before we can run,” adding energy companies should also be encouraged to keep working towards alternative technologies.
“Nobody knows better than they do that fossil fuels are a finite commodity,” he said.
Coun. Meghan Lahti, who’s also the chair of the finance committee, said even pulling some money away from fossil fuel companies sends a message.
“It’s a small but positive step,” she said. “Times are changing.”
