In a major step toward divesting from the fossil fuel industry, the Somerville Retirement Board (SRB) filed a unanimously adopted updated Statement of Investment Objectives that specifically considers investment funds that do not include fossil-fuel securities with the Public Employee Retirement Administration Commission (PERAC).

The new policy was submitted to PERAC on Jan. 5 after it was approved in a 5-0 vote at the SRB’s Dec. 21 meeting. The policy was the result of the board’s diligent review of the issues surrounding fossil fuel divestment, including a thorough RFI process in the summer of 2016.

“We are grateful that the SRB carefully examined all the issues and came to the conclusion that divestment from fossil fuel companies can be in the best interest of the retirement system’s members,” said Rachel Weil of Fossil Free Somerville, which advocates for Somerville to divest its pension fund from the top 200 fossil fuel companies, as identified by CarbonTracker.org. “The new policy is a clear statement recognizing that environmental issues must be considered when weighing the future value of investments.”

The updated policy is believed to be the first in the commonwealth that specifically addresses fossil fuel investment at the municipal level. While other communities and Somerville’s Board of Aldermen have passed resolutions in favor of divestment, a position also supported by Somerville Mayor Joe Curtatone, this is the first policy move made by a retirement board that could actually lead to divestment.

“Cities, towns and universities are increasingly aware that our reliance on fossil fuels can’t continue,” said Colby Cunningham of Fossil Free Somerville. “The planet is warming at a dangerous rate, and we must act now to limit the damage ahead. As the effects of climate change worsen, society’s options for combatting those effects will undermine the economic underpinnings of fossil fuel companies, making it a dangerous industry for retirement systems to be invested in, and the SRB has shown it’s committed to protecting its members.”

Fossil Free Somerville said the due diligence shows that the SRB takes the issue seriously, and it is committed to doing it right. The system has not yet divested from the fossil fuel industry, but the board has heard presentations and received proposals from investment managers about fossil-fuel-free funds that could replace risky assets currently exposed to a historically volatile fossil fuel sector.

“We’re excited to continue working with the SRB as it explores investments that don’t include fossil-fuel securities,” Cunningham said. “We believe the actions taken by the board point the way ahead for other municipalities that want to think strategically about climate change and how it will impact the well-being of their fund participants.”

About Fossil Free Somerville

Fossil Free Somerville is a citizens advocacy group that has been working to encourage the Somerville Retirement Board to divest the city’s pension fund from the top 200 fossil fuel companies. It led a successful petition drive to convene a hearing of the Board of Aldermen to vote on a divestment initiative in March 2014. The board approved a nonbinding resolution in support of divestment in June 2014.

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