Divestment is a costly, empty gesture

What does fossil fuel divestment accomplish? Higher management fees.

A recent editorial ("An atmosphere of neglect," Oct. 20) ignores the high cost and ineffectiveness of fossil fuel divestment.

Research finds the transaction and management fees related to divestment can rob endowment funds of as much as 12 percent of their total value over a 20-year time frame. According to the California State Teachers' Retirement System, "Divestment bears the risk of adversely affecting an investment portfolio and severs any chance to advance positive change through shareholder advocacy." The Vermont Treasury also found divestment would cost their state pension funds $10 million per year in lost returns. Meanwhile, divestment has no tangible impact on the environment, including no effect on targeted companies, their market value or practices.

Maryland should focus on policies that actually support the environment, not empty political gestures like divestment. Lawmakers should uphold their fiduciary responsibility and make responsible choices that benefit the pension funds our hard-working state employees rely on.

Jeff Eshelman, Washington, D.C.

The writer is a senior vice president of the Independent Petroleum Association of America.

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