The Biden administration has signaled its commitment to tackling the financial risks posed by climate change through executive orders and key appointments. But advocates say the president is missing an easy opportunity for big climate progress: divesting the Thrift Savings Plan (TSP), the federal employee pension fund.
The TSP is the largest defined contribution plan in the world, with assets worth nearly $700 billion. It has also steadfastly refused to embrace the growing trend of pensions divesting from fossil fuels, since its governing body, the Federal Retirement Thrift Investment Board (FRTIB) says it does not have the authority to divest from fossil fuel assets.
But other public pension funds have done exactly that. In June, Maine became the first state to order its public pension funds, worth about $17 billion, to divest from fossil fuels through legislation. Earlier this year, three New York City pension funds announced that they would be divesting about $4 billion worth of assets following years of activist pressure.
Federal employees and lawmakers are now escalating a campaign to pressure the FRTIB to divest from fossil fuels, arguing that it is the board’s fiduciary duty to do so. Their demands were aided in recent weeks by a new report from the Government Accountability Office (GAO), which concluded the board was exposing the fund to financial risks by not assessing the impact of climate change.
President Joe Biden, meanwhile, could take matters into his own hands.
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