According to Town Manager Peter Joseph, Freeport's investment reserves total about $7.7 million, though it's unclear what percentage of that is in fossil fuel.
Freeport town officials are considering municipal divestment from fossil fuel companies in light of climate change and a 2021 law directing the state to drop fossil fuel investments.
At Tuesday’s council meeting, town leaders held a preliminary discussion on divestment. Councilors Matthew Pillsbury and John Egan voiced support for the idea.
“There is ultimately down the road a cost to the town for inaction of climate change,” said Pillsbury. “I mean we are going to see real dollar cost to flooding, to additional snowstorms, I mean it’s just an unavoidable fact.”
Councilors Darrell Fournier and Chip Lawrence voiced some hesitation.
“I think we take more beneficial actions on other positions other than this,” said Fournier, advocating instead for a “hands-on” approach to address climate change. “This, I think is kind of a feel-good thing to be quite honest with you.”
The release of greenhouse gases into the Earth’s atmosphere is the primary cause of climate change, according to The Maine Climate Council, a state-run organization. The organization predicts that “by 2050, Maine will likely see between 1.1 and 1.8 feet of relative sea level rise, and potentially between 3.0 and 4.6 feet of sea level rise by the year 2100.”
Town Manager Peter Joseph said that Freeport’s investment reserves total around $7.7 million. It’s unclear at this point what percent of that is in fossil fuel companies, Joseph said. The portfolio is made up of conservative holdings like index funds and is managed by Bangor Savings Bank.
“It’s certainly in our investments, and it’s proportional to the stock market as a whole,” said Joseph. “We don’t target fossil fuels, but we also don’t avoid them.”
A more in-depth presentation about divestment will likely be on the agenda in the coming months, Council Chairperson Dan Piltch said, which would provide a clear definition for fossil fuel company and greater insight into the potential impact on rate of return.
The conversation was sparked in part by new Maine legislation signed into law last summer, which according to a report by the Portland Press Herald, requires both the state treasurer and the board of the state pension fund, MainePERS, to divest from fossil fuels by January 2026. This made Maine the first state in the country to enact a law requiring fossil fuel divestment.
There are a total of 1,500 institutions that have made divestment commitments across the world, according to the Global Fossil Fuel Divestments Commitments Database, a website maintained by the environmental organizations Stand.Earth and 350.org.
The institutions’ investments are cumulatively valued at approximately $39.88 trillion, and 11.4% of them are governmental. Examples include the Los Angeles City Employees Retirement System, Harvard University and the Maine Council of Churches.
In 2012, Unity College in Maine became the first higher education institution to divest from fossil fuels in the United States. The college’s portfolio was at about $12.5 million in 2012 and is now around $18.5 million, according to Unity College President Dr. Melik Khoury.
“I would say my predecessor and the team back then didn’t feel that we had any other option, because the climate crisis real, it is more than a political rhetoric it’s a real scientific fact. We are America’s environmental college, how could we not walk the walk,” said Khoury.
At the time, Khoury said that one of the challenges was identifying investments that did not include fossil fuel holdings, but since then more fossil fuel-free opportunities have been developed. The college met its investment goals every year Khoury said, averaging double digit returns.
Last fall, students at the University of Maine pushed the board of trustees to make a complete divestment from fossil fuels, the Press Herald reported, which at the time made up about $14.3 million of the UMaine system’s $759.6 million portfolio.
Reports from 2013 through 2016 indicate similar efforts at Bowdoin College in Brunswick. The Times Record reported in 2016 that over the years students have held several demonstrations asking the college to divest, but with no success.
A February 2019 report by the Institute for Energy Economics and Financial Analysis non-profit states that in 1980 the fossil fuel industry made up 29% of the S&P 500. As of 2019, it consists of about 5.3%, reportedly the lowest level in 40 years.
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