Coal’s in crosshairs, but Vermont not done quitting tobacco
MONTPELIER, Vt. (AP) — Vermont’s debate over divesting coal and oil from its pension portfolio appears to have smoked out an uncomfortable truth: Nearly 20 years after the state proclaimed its pension funds tobacco-free, they still contain some tobacco investments.
That word came at a meeting this week of a subcommittee of the board that oversees Vermont’s public retirement funds. The subcommittee is studying divestment from coal, oil and other fossil fuel stocks.
State Treasurer Beth Pearce confirmed the tobacco investments are contained in “co-mingled” index funds. The state’s roughly $3.6 billion in pension funds are about 30 percent in separately owned stocks and 70 percent in co-mingled funds similar to the mutual funds in many retirement accounts, according to a spreadsheet provided this week to members of the Vermont Pension Investment Committee.
Through those comingled accounts, about $6.8 million of retirement funds for teachers, state employees and municipal employees is invested in tobacco, Pearce said. That equates to about 0.19 percent of the overall portfolio — similar in scale to 95 cents out of $500. Vermont Public Radio reported about the continued tobacco investments Wednesday evening.
“In none of our separately managed accounts and in none of the things where we own the assets do we have any tobacco holdings,” Pearce said. It’s the “collective investment vehicles that may own tobacco securities if it is in the best interest of the fund to do so,” she said.
It’s not in the best interest of a state that has fought hard, and successfully, to reduce its smoking rate in recent years, said Rep. George Till, a Jericho Democrat, physician and frequent scold of the tobacco industry.
“I think it’s unconscionable that the state would hold any fund that still includes tobacco company stocks,” Till said. “This is an industry that’s killing 1,000 Vermonters a year and is still working hard to prey on Vermont’s youth and get them addicted to these awful products.”
There are options for tobacco-free investments. A spokeswoman for the Washington-based Forum for Sustainable and Responsible Investment pointed to a page on the group’s website Thursday that listed more than five dozen co-mingled funds that exclude tobacco from their investment portfolios.
Gov. Peter Shumlin brought the debate over fossil fuel divestment to the fore when he called in his State of the State Address in January for the state to get out of coal and ExxonMobil. He singled out the oil giant, accusing it of hiding what it knew about climate change for decades, an allegation the company denies.
Pearce, like Shumlin a Democrat, has pushed back hard, saying investment decisions should not be infected with politics. She has called fossil fuel divestment likely costly to the state’s pension funds and “a meaningless gesture” in the fight against climate change.
Shumlin spokesman Scott Coriell said the governor was “surprised and disappointed” to learn the state still had investments in tobacco. He said that “after Vermont supposedly divested from tobacco, VPIC (the Vermont Pension Investment Committee) apparently reinvested in it. Tobacco stocks, like coal and Exxon Mobil, are not ones Vermont should own. Instead of moving forward with a more socially responsible investing policy, it appears we’re actually moving backward.”