Legislative Counsel presented an amendment, recommended by the Treasurer, on Friday. The amendment adds a new definition of de-minimus exposure which means holding less than 2% of the overall investment. The language recommends that VPIC develop a plan which identifies stocks and securities are carbon-heavy and make suggestions on how to divest by the end of 2030 with minimum exposure of funds.

The second instance of amendment says that nothing in the plan shall expose investments, and would simply not apply to investments in index funds, private funds. The language allows the legislature to see if there are fossil fuel investments in these indexes. The statute would also make it clear that there would be no new investments made after 2028. The plan needs to focus on extricating ourselves over time.

Treasurer Pieciak stated that discussions around divestments are complex. The amendment is an attempt to take a step forward but also to create a balance. He added that it is important for pensions to be secure and, in the short term, he is hoping that things will not become more expensive than anticipated.

The approach being recommended by the Treasurer is what Middlebury College did. They had previously noted that private equity is important to consider and Pieciak is more concerned on the opportunity side of returns on investments. He stressed that "we need to make sure we don’t do any harm to the pension system."

Senator Clarkson appreciated the compromise. She believes that reporting on the investments is an important part of the bill so that the Legislature can track trends. She added that it’s a way to have a "check back of investments." 

Eric Henry (Chief Investment Officer, Vermont Pension Investment Commission) spoke in agreement with the amendment. He asked the Committee for more time to do the studies they are requesting. I takes time to do the Request for Proposal to find consultants and then to do the research itself, he noted. The Committee seemed receptive to making the changes that were being requested.

Jeff Fannon (Executive Director, VT-NEA) spoke about the importance of supporting a carbon-free environment but also stated the NEA is concerned about the pension fund finances. He understood that the proposal in the amendment worked for Middlebury, so he stated that "if it worked for them it will work for us." 

Steve Howard (Executive Director, Vermont State Employees Association) also supports, what he dubbed, the "Middlebury miracle."  VSEA’s position is similar to that of the VT-NEA. He also emphasized that VPIC is the right entity to make the investment decisions.

David McColgin (a member of the Third Act Vermont) said this was a "watershed moment." As he reflected on the Treasurer's comments, he said that "Vermont leaders are finally recognizing the need to divest." He suggested that if "we don’t do this the earth will burn up."

Tom Sanzillo (Director, Institute for Energy Economics and Financial Analysis) said he has been looking at pensions and divestitures worldwide. He is involved in many pensions in New York. He believes this bill is "perfect in many ways" because it asks for full identification of carbon investments, requires a plan and reporting. He added that "the commentary that has been put forward against the bill has no basis in fact." His reasoning is that there is "no basis" for the premise that divesting will loose money for the plan.

Steve Crofter (a retired teacher) spoke next. He explained that the bill impacts him personally. Vermonters "care about our children and believe in the future," he said, but "our use of fossil fuel makes us fear for the future. People are dying!" He believes there are actions that can still be taken and we must divest as soon as possible. He agreed that breaking existing investment contracts could be costly, and recommended they let the current contracts go forward but require no additional contracts be entered into. Overall he feels that the bill protects the pension plan.

.