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City has long talked about climate change. Now it’s putting its money where its mouth is

by Allen Best

In August, when the $3.1 million in Berkshire Hathaway bonds that the City of Aspen holds mature, the city will not be repurchasing.

It’s not for lack of performance. The funds have done tolerably well. Rather, the Berkshire Hathaway bonds are tainted by a bad environmental record.

The city wants its $131 million in investments to reflect Aspen’s environmental values. That most prominently means walking away from carbon.

“The City of Aspen is taking the first steps to putting our money where our mouth is,” says Mayor Torre (he goes by one name). “I anticipate a two-year process to fully divest from the investments that don’t reflect our community values. Our intention is to be fiscally responsible as we get policy in place to guide our banking and investments to meet our environmental, social, and governance expectations.”

In this divestment from fossil fuels, Aspen joins Denver, Los Angeles, and New Orleans, all of whom have washed their hands of carbon investments, but also Boulder and Boulder County.

This is from Big Pivots, an e-magazine tracking the energy and water transitions in Colorado and beyond. Subscribe at

The biggest divestment of all was the New York State pension fund with its $226 billion in assets. That’s enough clout to accelerate the transition to cleaner energy sources, the New York Times noted in a December 2020 report. In 2019 the fund owned $12 billion in fossil fuel companies.

Representatives of the Roaring Fork chapter of 350 Colorado say they have begun outreach efforts to Carbondale and Glenwood Springs governments to persuade them to divest. Other 350 Colorado members say chapters will undertake similar efforts in Fort Collins and Colorado Springs.

Divestment campaigns and the creation of chapters were initiated by an article that climate activist Bill McKibben wrote for Rolling Stone in 2012. The article, “Global Warming’s Terrifying New Math,” laid out the argument that fossil fuels already documented and much of it “owned” but still in the ground could not be possibly burned if the climate of the Earth is to remain habitable for most of today’s population of humans.

“We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn,” McKibben wrote. “We’d have to keep 80 percent of those reserves locked away underground to avoid that fate.”

McKibben followed up with a Do the Math tour of the United States in which he made the case why the global concentration of carbon dioxide needed to be lowered to 350 parts per million. That spring they had surpassed 400 ppm for the first time. (They’re now at 417 ppm).

Bill McKibben, right, confers with Land Institute founder Wes Jackson at the Prairie Festival in September 2019. Photo/Allen Best

In Colorado, McKibben spoke at the Glenn Miller Ballroom at the University of Colorado-Boulder to a standing-room-only crowd of about 1,100 people. (And you can read about his bus ride from Omaha to Denver here.).

Boulder was among the first municipalities in the country to divest its investments from fossil fuels. But Boulder has found that it’s hard to entirely remove the carbon from its money, as the Boulder Daily Camera explained in 2017. Even now it continues to bank with JP Morgan Chase, a financier of controversial Bakken and Dakota Access pipeline projects.

One alternative—but not in Colorado—is for municipalities and counties to conduct their banking through credit unions and public banks. Colorado requires banks be FDIC insured, and public banks and credit unions are not. Legislation is expected to be introduced this legislative session that would end this prohibition.

Aspen has no formal policy governing its investments in carbon-based capitalism. The city bought ExxonMobil stock in September 2017 but liquidated the stock, then worth $2 million, in March 2919. This, said Peter Strecker, the city’s finance director, in a memorandum to the city council before a Feb. 1 meeting, was the result of a staff decision to align investments with the community’s environmental values.

But what about those who finance fossil fuel companies?

As with Boulder, Aspen is wrestling with this issue. City staff wants direction from the elected officials. It’s not part of the official matrix of risk, return and liquidity that guides the city’s current investment policies.

Eighty percent of the city’s investments go to the public sector, including municipal bonds. That sector yields generally lower but safe returns as compared to the private sector. The private or corporate sector generally delivers higher returns, if not necessarily so of late, Strecker’s memo to the council said.

The city’s corporate holdings—Microsoft, US Bank, and Apple Inc., for example—do not directly involve fossil fuels. The possible exception is the city’s $3.4 million investment in Toyota Motor Credit Corp.

The Roaring Fork Valley chapter of, the activist group created in the wake of McKibben’s tour, has been pushing Aspen to divest. The group’s Will Hodges, at the Feb. 1 meeting urged the city council to “adopt a policy against investing in the financing, production, and delivery of fossil-fuel energy.”

The public conversation began in early November. The upshot of the Feb. 1 meeting was agreement that staff will work up a scoring guide to govern investments.

“I suspect we will be learning more and refining this policy going forward,” says Torre. “We are looking at other Colorado communities that are divested and divesting to learn how to best evaluate investment opportunity and strategy.”

A test case for developing the criteria used in this potential policy is the $2.9 million in bonds that Aspen has invested in Wells Fargo. The bonds mature in October 2022.

A pumping jack in a cornfield next to an enclosure for a new drilling site north of Denver. Photo/Allen Best

Insight Investment, the city’s financial advisor, has a team of analysts who conduct research on environmental, social, and governance issues for publicly traded firms. Based on this consultant’s research, Wells Fargo has a sweet smell, despite that little problem of some slithery come-hither hucksterism a few years ago. That public relations shiner seems to have disappeared in this rating.

Doubts remain among city council members. Hodges, the 350 Roaring Fork Chapter representative, told the Aspen council at its Feb. 1 meeting that Wells Fargo has financed $198 million in coal, oil, and gas projects since 2016.

“Using Wells Fargo as an example will be helpful as we look at various rating programs and setting our thresholds for investment,” says Torre. “I have already had an exchange with them about our desire to be smart, conscientious, fiscally responsible investors. Wells Fargo is working on their ESG (environmental, social and corporate governance) scoring and examining their policies.”

Denver Mayor Michael Hancock announced in April 2019 that the city had sold $50 million in corporate bonds issued by ExxonMobil and Chevron.

350 Colorado and others wanted Denver to also divest of the city’s holdings in JP Morgan Chase and Wells Fargo, Westword reported at the time.

Twelve cities around the globe, including 4 in the United States, announced divestment in 2020.

Perhaps most surprising was New Orleans. After all, Louisiana is an oil state and, even more, natural gas. About 70% of the state’s electricity is generated using natural gas. In Triple Pundit, Kate Zerrenner pointed out that New Orleans is a different city after the devastation of Hurricane Katrina, one more acutely aware of its vulnerability to climate change. A 2017 plan called for the city to reduce carbon emissions 50% by 2030. And in February 2020, the governor of Louisiana announced a plan to reach net-zero emissions by 2050. This was part of a coastal restoration and flood preservation plan.

This is from theBig Pivots, an e-magazine tracking the energy and water transitions in Colorado and beyond. Subscribe at

In New York, the divestment announced was the result of an agreement by the state controller, Thomas DiNapoli, and state legislators, who were poised to pass legislation requiring him to sell fossil-fuel stocks. The New York Times in December explained that legislators wanted quicker action, and he persuaded them a broader, more nuanced approach would accomplish more. In the next 5 years, the pension fund will drop many of its fossil fuel stocks and sell its share in other companies that contribute to global warming in 2040.

The litmus test for the New York fund will be the ability of the companies to show “future ability to provide investment returns in light of the global consensus on climate change.”

The decision was a setback for oil and gas companies and industry groups. The Times said a slide in the value of their stocks—ExxonMobil wrote down $20 billion in assets in November—undermined their main argument against divestment: that fund managers’ first responsibility to retirees and other investors is to maximize profits.

DiNapoli, New York’s fund manager, had long advocated for engagement with companies over divestment.

Alice Hill, a senior fellow at the Council on Foreign Relationships, said that pension funds have been conservative investors, reluctant to make decisions that could be seen as political. “For a major investor to say we’re getting out of this business sends a very strong market signal that climate change is a financial risk,” she said.

Oil extraction equipment in the Wattenberg Field of Colorado. Photo/Allen Best

Colorado 350 and allied groups have been trying to get the Colorado Public Employees’ Retirement Association to divest its $45 billion in holdings of fossil fuels. PERA provides retirement and other benefits to more than 650,000 current and former teachers, state troopers, snowplow drivers, corrections officers, and other public employees.

A bill was introduced in the 2019 legislative session by State Rep. Emily Sirota, a Democrat from Denver, that would have ordered PERA to conduct a study. It didn’t get out of committee. The PERA Board of Trustees pre-empted the discussion with a lengthy statement that urged legislators “thoughtfully consider such proposals with caution and fiduciary care” and described divestment as a slippery slope.

The PERA trustees’ statement  statement cited several arguments:

  • Divestment, by its nature, adversely affects diversification by limiting the investment universe.
  • Divestment comes with significant associated costs to search for and certify those companies that have the characteristics of affiliation as targeted by a divestment effort, plus the transaction fees.
  • The money held by PERA for retirees is not actually public money, but the money of the retirees.
  • PERA’s funds will constitute a “very small fraction of the company’s total global operations” and hence there’s no assurance the impact of that pressure will be felt as intended, and there might well be unintended consequences.

A bill was planned last year to propose prodding PERA into study of divestment but got bumped because of the covid-shortened session, says Deborah McNamara, the campaign director for 350 Colorado. Another bill will be introduced this year, again by Rep. Sirota, but the exact proposal is still being worked out, she says.

Fossil Free PERA in 2020 released a study that found that PERA had already lost $1.77 billion because of a decline in the value of fossil fuel companies in the last decade.

Whether in Aspen or at PERA headquarters a few steps from the Colorado Capitol in Denver, the broad, overarching question is what ultimately is the value of divestment?

The setting and circumstances were different last summer when a member of the Air Quality Control Commission wondered out loud whether the best way to make technology shifts is to offer superior technology.

Julia Williams, the community and development director for 350 Colorado, had thought about this before. “Market-based strategies may get us there eventually,” she answered, “but they will not get us there nearly as fast as we need to avoid climate catastrophe.”

Allen Best
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