Championing Workers' Rights: The Imperative of Climate-Conscious Pension Investments

As veteran union advocates with nearly half a century of combined experience, we have dedicated our careers to empowering workers to secure a meaningful seat at the table. The significance of having a "seat at the table" cannot be overstated—workers should be able to be a part of decisions that affect their lives and schedules, ensuring respect for their expertise, experience, and values. Workers who have a seat at the table can and do demand economic stability that allows them to live, work, and raise their families with hope for the future. Part of that hope for the future is the prospect of a secure retirement after decades of work.  

Public sector unions like SEIU, AFSCME, AFT, and NEA have been instrumental in safeguarding public workers' pensions and advocating for stronger retirement savings options for private sector workers.  And they have seen it all:  Throughout the 2010s, well-funded anti-worker organizations like ALEC (and the politicians they supported) launched broad attacks on public sector workers, casting these essential workers as economic burdens and portraying teachers and city and state employees as enemies. Because so much of corporate America had eliminated their pension funds, they argued, the public sector had to as well. 

And everything old is new again.

Over the last year, attacks from those same well-funded anti-worker organizations have claimed that the great threat to public pension funds is policies that require funds to consider the risks of climate change in making investments. These anti-pension activists now say they want to “protect” pension funds from considering the risks of climate change.   

This couldn't be further from the truth. Resistance to integrating climate considerations into investment decisions is reminiscent of a child's tantrum—covering eyes and ears, shouting to drown out reality.

The fact is, that the climate crisis is severely impacting workers, threatening their livelihoods, and pushing the urgent need for pension funds to adopt long term investment horizons that prioritize long-term sustainability.

The assets managed by these pension funds represent the hard-earned retirements of millions of workers. They are also a testament to the power of workers' voices, as many of these funds are overseen by a board of trustees representing retirees and workers themselves. These trustees, whether elected or appointed, are there to serve the fiduciary interests of workers, giving them a literal and figurative seat at the table in managing these funds and their investments.  

These trustees and many of the professional staff who work for them have been asking good questions about the risks of climate change. How will the changing climate affect these investments? Are we invested in companies that refuse to change their business model to address the risks that climate change poses, including in our communities? Are the people managing the money taking these risks into account?  

Yet the same organizations that campaigned against the very existence of public sector pensions for years now insist that these kinds of questions and this kind of analysis are inappropriate. As these debates continue, it's clear that the questions posed by pension trustees and calls for companies that fail to adjust their strategies in response to climate risks to be held accountable are not just necessary; they are a crucial part of their fiduciary duty to the workers they represent. Ignoring these risks would be a betrayal of that duty.

Public pension funds should ensure that investment strategies address emerging global risks like climate change because workers' livelihoods and retirement security depend on it. The path forward demands we counter misinformation and actively advocate for policies that recognize the interconnection between our economic systems, the climate crisis, and the well-being of workers and their families.

ABOUT CLIMATE FINANCE ACTION

Climate Finance Action (CFA) is a women-led, 501(C)3 non-profit organization equipping stakeholders and decision-makers to leverage the transformative power of publicly-held capital for real-world climate solutions to ensure a just transition to an inclusive economy in favor of people and the planet. With a focus on collaboration, education, and strategic partnerships, CFA has facilitated groundbreaking dialogues, developed comprehensive educational materials, and engaged with numerous stakeholders— educating 8,000+ union leaders and members and advising over 40 state treasurers and pension staff working towards policy reform.