Fossil Fuel Divestment and Engaging With Corporate Clean Energy Transition Plans Both Necessary

On July 26, 2026, former Washington State legislators Reuven Carlyle and Mark Mullet wrote a response in the Seattle Times to a July 10 op-ed, regarding divesting state funds and public pension funds from fossil fuels, written by Jeff Johnson, former President of the Washington State Labor Council, AFL-CIO and Greg Devereux, former Executive Director of the Washington Federation of State Employees. What follows is a letter Jeff Johnson sent to Reuven and Mark in response.

Dear Reuven and Mark,

Let me begin by saying I commend you both on your years of public service in the legislature. Having worked the legislature for over 30 years, I recognize the personal sacrifice and commitment that you both made, to make the state a better place to live.

I found your July 26 argument short-sighted, inadequate to address the financial responsibilities of the state in a world increasingly defined by climate chaos, and in some ways just plain misleading.

Fossil fuel assets have been significantly underperforming the market for the past decade. In spite of exogenous price shocks by Putin’s war in the Ukraine and Trump’s war in Iran, the declining value of fossil fuels relative to other more profitable assets should be concerning from a fiduciary perspective. Nonetheless, as climate chaos has literally set parts of the world on fire, caused an increasing decline in bio-diversity, threatened water and food sufficiency, increased ocean acidification and warming, and fueled a climate refugee crisis, the financial industry has recently invested trillions into growing and developing the fossil fuel industry. The Washington State Investment Board (WSIB) and Washington State, with its $8 billion plus investments in fossil fuels, are part of this problem.

The hidden costs, or what economists call externalities, of climate chaos are extraordinary but not often spelled out. The rising cost of property insurance, food and water costs, lost jobs, housing, public infrastructure, uncompensated health care costs due to climate change added to the personal and public costs of mitigating climate disasters are eating up greater and greater chunks of personal and public budgets. This impacts every level of government and every worker and retiree. A few extra dollars in a weekly paycheck or a monthly pension payment increasingly falls short of in-creased costs due to climate change.

You argue that “evidence decisively” shows that divesting from fossil fuels will not increase state or pension returns nor help fight climate change. You cite academics who show that divestment from fossil fuels has not raised the cost of capital and therefore not constrained the operations of fossil fuel companies nor cut emissions.

This is not surprising given that banks, insurance companies, and bottom-feeding private equity corporations continue to rapaciously invest in fossil fuels. But this misses the real point. No one is arguing that divesting from fossil fuels will immediately cause emissions to fall. Nor is anyone arguing that it isn’t important to engage with non-fossil fuel companies over clean energy transition plans. What we are arguing is that public and private institutional investors can meet their fiduciary responsibilities to protect their assets (pension or otherwise) and tackle climate change head on.

Over 1,700 institutions worldwide, managing over $40 trillion in capital assets, have made commitments to not purchase fossil fuel assets and divest from existing fossil assets. Of these 1,700 plus institutions, 35% are faith based, 15% are educational, 12% + are philanthropic, 12% are pension funds, 11% + are governmental, and about 9% are for-profit companies.

What these organizations recognize is that both budgets and investment portfolios are moral documents at the same time that they realize they can meet their fiduciary duty without holding fossil fuel assets.

Given the existential crisis climate change presents, you can no longer say, with a straight face, that we will address climate change only through legislative change, and continue to negate that work through the financial investments we make. The accelerating climate chaos that our world faces requires us to use every tool at our disposal to stop this assault on the existence of our planet.

Relative to climate change, it is a false dichotomy to say the work of the legislature and the work of Washington State Investment Board must remain in two separate lanes and never the two shall meet. Climate chaos is accelerating at such an alarming pace that legislative policy fixes are just not enough. While the Climate Commitment Act and Clean Energy Transformation Act were good first steps, they are by no means a reason to feel content. As the state law requiring all electricity in Washington State to be carbon-free by 2045 approaches, utility companies in the state are making plans to greatly expand power plants fueled by natural gas. While this will lower carbon emissions, it will create more methane emissions, which heats the atmosphere even more quickly. This is unacceptable.

Given the declining value of fossil fuel assets, divesting these assets over a five-year period of time can increase our pension and state fund returns, while meeting the fiduciary obligations of the WSIB. That’s what the NYC pension funds found when they divested from $4 billion of fossil fuel assets. According to Monte Tarbox, Chief Investment Officer, since divestment, the NYC pension funds have seen an improvement in returns.

There is no reason to scare our hardworking public sector teachers, firefighters, or state employees that divesting from fossil fuels will reduce their pension benefits.

Divestment is a tool. I would like to see Washington State catch up with the over 1,700 institutions sending a message to the fossil fuel industry and to the financial industry that major sectors of civil society reject the false narrative that divestment will lower portfolio returns, that one can’t have a profitable and diversified portfolio without fossil fuels, and that, when it comes to our very existence, we should leave what we invest in to the bean counters.

I will close this letter with a statement from Archbishop Desmond Tutu from a press conference at the 2014 United Nations Climate Summit.

"Climate change has become the human rights challenge of our time. I commend the individuals and institutions who are announcing divestment of their assets from fossil fuels and are investing instead in the clean energy needed for human survival."

Finally, I want to be able to, someday, tell my nine-month-old grandson, Alessandro, that I am truly sorry for what we have done to this planet and that we finally woke up and did everything we could to reduce the destruction that is caused by fossil fuel induced climate change.

Best,

Jeff Johnson,

Retired union leader, pensioner, garlic and flower farmer, and Co-President of PSARA.