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Home My WebLink About35. 21-87FEBRUARY 9, 2021 21-87 RESOLUTION (CARRIED_7-0___LOST_______LAID OVER_______WITHDRAWN_______) AS AMENDED PURPOSE: APPROVE DIVESTMENT FROM FOSSIL FUELS INITIATED BY: COMMUNITY DEVELOPMENT SUSTAINABILITY ADVISORY BOARD RECOMMENDATION: Approved WHEREAS the climate crisis is a serious threat to current and future generations in Oshkosh and around the world; and WHEREAS, the Intergovernmental Panel on Climate Change (IPCC) ‘Fourth Assessment Report’ found that global warming is already causing costly disruption of human and natural systems throughout the world. Global warming is driving regional and seasonal temperature extremes, reducing snow cover and sea ice, intensifying heavy rainfall, increasing the prevalence of wildfires and hurricanes, and changing habitat ranges for plants and animals; and WHEREAS, scenarios presented in the ‘IPCC Special Report on 1.5 °C’ (2018) advise a decline in the use of coal to 18% of the 2020 levels in 2050, oil to 34%, and natural gas to 57% (median values); and WHEREAS, almost every government in the world has agreed, through the 2009 Copenhagen Accord, that any warming above a 2°C (3.6°F) rise would be unsafe; and WHEREAS, from data based on ‘IPCC report on 1.5 °C’ and 'the Mercator Research Institute on Global Commons and Climate Change (MCC) Carbon Clock', in order to stay below 1.5°C from the end of calendar year 2018, the atmosphere could only absorb approximately 420 gigatons (GT) of CO2, and since then human activity has continued so the atmosphere has continued to absorb GT of CO2; now, at the end of 2020, the atmosphere can only absorb approximately an additional 300 GT of CO2 to stay below the 1.5°C threshold; and FEBRUARY 9, 2021 21-87 RESOLUTION CONT’D WHEREAS, for the purposes of this resolution, a “fossil fuel company” shall be defined as any of the two hundred publicly-traded companies with the largest coal, oil and gas reserves as measured by the gigatons of carbon dioxide that would be emitted if those reserves were extracted and burned, as listed in the Carbon Tracker Initiative’s ‘Unburnable Carbon’ report; and WHEREAS, in its ‘Unburnable Carbon’ report, the Carbon Tracker Initiative found that fossil fuel companies possess proven fossil fuel reserves that would release approximately 2,795 gigatons of CO2 if they are burned, which is five times the amount that can be released without exceeding 2°C of warming; and WHEREAS, in its ‘Untapped Potential for Climate Action’ report, the International Renewable Energy Agency found that countries will need to at least double their annual investment in renewables in order to limit global warming to within 2 degrees Celsius by 2100; and WHEREAS, as more countries reduce their fossil fuel needs the risks of staying invested in the fossil fuel industry will increase; conversely whereas renewable energy sources are becoming more prevalent in the marketplace the investment in renewable energy sources becomes more financially stable; and WHEREAS, according to the report ‘Energy Investing: Exploring Risk and Return in the Capital Markets’ written jointly by the International Energy Agency and the Centre for Climate Finance & Investment, renewable energy investments exhibited higher returns than fossil fuels, showing 66% in five years and 192% in ten years versus fossil fuel investments which earned -9.6% and 97% during those same respective timeframes; and WHEREAS, the City of Oshkosh has a responsibility to protect the lives and livelihoods of its inhabitants from the threat of climate change; and WHEREAS, the Oshkosh Common Council approved the Oshkosh Sustainability Plan on May 22, 2012; and an update on March 10, 2020; and FEBRUARY 9, 2021 21-87 RESOLUTION CONT’D WHEREAS, the Oshkosh Sustainability Plan advises the City of Oshkosh that “Shifting away from fossil fuels has the significant benefit of avoiding pollution that negatively impacts health and increases greenhouse gases” (Energy: Introduction); and WHEREAS, the Oshkosh Sustainability Plan advises that the City of Oshkosh “Encourage energy efficiency and promote the use of renewable energy” (Energy: Renewable Energy); and WHEREAS, the Oshkosh Sustainability Plan advises that the City of Oshkosh “Collaborate with local companies emitting air pollutants, exploring ways to continue to improve their pollution reduction practices and technology” (Atmosphere: Air Quality Improvements); and WHEREAS, the City of Oshkosh believes that its investments should support a future where all citizens can live healthy lives without the negative impacts of a warming environment. NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Oshkosh that the City of Oshkosh should immediately cease any new investments in fossil fuels, and divest from direct ownership of any public equities and corporation bonds of companies connected with fossil fuels within five years. shall continue its compliance with state law and current practice by refraining from direct ownership of any public equities and corporation bonds of companies connect with fossil fuels. BE IT FURTHER RESOLVED that the City of Oshkosh seek out investments in clean technology, renewable energies, sustainable companies and projects, and sustainable communities. Bold & Italics indicates amendment ITEM: APPROVE DIVESTMENT FROM FOSSIL FUELS Sustainability Advisory Board meeting of February 1, 2021. The Sustainability Advisory Board recommended approval of this item at their February 1, 2021 meeting. The following is the Sustainability Advisory Board’s discussion on this item. Ms. Davey explained that she spoke with the Director of Finance about the Fossil Fuel Divestment Resolution and that a few words were removed so the Long Range Finance Committee could be more comfortable with said resolution. Ms. Davey asked if there were any questions and if not if there was anyone who would like to make a motion to approve it as written. Ms. Hallquist asked what changes were made to the resolution. Ms. Davey explained that the whereas statement saying ‘direct ownership of any public equities and corporation bonds of companies connected with fossil fuels within five years’ is the new language. Ms. Hallquist questioned the word ‘direct’ and its intent. Ms. Davey explained that she took the wording from the Finance Director and that if he found it acceptable then the board should be okay with it. Ms. Hallquist again questioned what it meant. Brandon Nielsen explained that, in watching a previous council meeting regarding this resolution, it was his understanding that municipalities cannot directly invest in any equites or bonds. Mr. Nielsen asked if the SAB’s council member liaison, Mr. Poeschl, had anything to add. Mr. Poeschl concurred in that municipalities cannot own bonds that relate to utilities and other items like that. He added that by state code, the argument at council was, what SAB was asking the council to do already could not happen legally. Mr. Poeschl said that he believes this agreement to revise to the resolution shows a willingness from the Finance Department to look into the city’s investments into greater detail. Mr. Poeschl motioned to move the divestment resolution forward to the city council and Ms. Bogden Muetzel seconded. Mr. Poeschl made a point of order to address that the board should make a motion first and then discuss the topic. Ms. Davey acknowledge the point of order and asked if there was any further discussion needed. The board voted (8-0) to pass the motion. (Poeschl / Bogden Muetzel) TO: Honorable Mayor and Members of the Common Council FROM: Allen Davis, Community Development Director DATE: February 4, 2021 RE: Approve Divestment from Fossil Fuels BACKGROUND The Sustainability Advisory Board (SAB) has brought this Resolution forward and discussed it at several meetings in the past. The original Resolution was forwarded to the Long Range Finance Committee (LRFC) and discussed at LRFC. The LRFC did not make any changes to the City’s Investment Policy since the City is prevented by State Law from investing in stocks or bonds of private companies like those that deal with fossil fuels. ANALYSIS It appears the proposed Resolution regarding Divestment from Fossil Fuels is consistent with the Oshkosh Sustainability Plan since the Divestment seeks to reduce carbon dioxide and greenhouse gasses due to Fossil Fuels. FISCAL IMPACT There appears to be no local fiscal impact. The City cannot invest in Fossil Fuels based on current State Law. RECOMMENDATION The SAB recommended approval of this Resolution at its February 1, 2021 meeting. Please see the attached meeting minutes for more information. Submitted, Approved, Allen Davis, Mark Rohloff, Community Development Director City Manager