Nanaimo city council doesn’t want taxpayer money invested in the fossil fuel industry and is looking at changing its investment portfolio accordingly.
Council, at a meeting Monday, Aug. 30, voted 5-4 to ask for a staff report on a new city investment strategy that would divest from fossil fuel companies.
Coun. Ben Geselbracht made the motion, suggesting Nanaimo could build on fossil-fuel free investment strategies used by other municipalities, and could decide between immediate or more gradual timelines.
He said municipalities invest portions of reserves that aren’t being immediately used, which offers protection from inflation and also provides a financial return. Geselbracht said the city’s investments, mostly in guaranteed investment certificates and low-risk bonds, brought a return of roughly $1.4 million last year. He said city council’s adoption of the doughnut framework comes with a responsibility to adhere to environmental limits.
“It’s important that the City of Nanaimo is investing its money in a matter that’s supporting economic activity that is aligned with its climate action commitments and other environmental and social equity goals,” Geselbracht said.
He said he’s done some initial research into fossil-fuel-free investment funds.
“They tend to range right now about a quarter to half a percent less than current funds that are using fossil fuels and that will have an impact on taxation,” he said. “But the gap between the returns on the different funds is greatly changing.”
Jake Rudolph, the city’s chief administrative officer, recommended that councillors schedule, at the committee level, a staff presentation on the city’s investment portfolio and current policies.
“There’s a lot of money attached to this. We’re in the multi-million dollars here, because the city collects hundreds of millions of dollars over the course of time…” he said. “It’s just making sure that you get the right information and you understand it and you’re comfortable with it.”
Coun. Ben Geselbracht:
“It’s important that the City of Nanaimo is investing its money in a matter that’s supporting economic activity that is aligned with its climate action commitments and other environmental and social equity goals."https://t.co/vy711lffvM #Nanaimo pic.twitter.com/4lIgbY4Xlr
— Nanaimo Bulletin (@NanaimoBulletin) August 31, 2021
The majority of council supported Geselbracht’s motion, including Coun. Tyler Brown who suggested moving away from fossil fuels is long overdue.
“The Stone Age didn’t end because they ran out of stones,” he said.
However, a minority of council spoke against the motion, including Coun. Ian Thorpe who said fossil fuels are needed to some extent “to fuel our industrial nation” and asked that the topic be referred to a governance and priorities meeting. Coun. Sheryl Armstrong supported referral, noting that the oil industry isn’t just about burning fuels as petroleum-based products are found everywhere.
Mayor Leonard Krog said councillors need to show fiscal responsibility as stewards of the city’s resources, and expressed doubt that his fellow council members or most citizens know much about the City of Nanaimo’s investment policies.
“The concept of divestment as a way of achieving the significant changes that are required in our consumption of fossil fuels … to me is outweighed by far more practical considerations,” he said.
Councillors Erin Hemmens, Zeni Maartman and others expressed confidence that the motion allowed leeway for council to make an informed decision at a later date.
“The motion here very clearly asks for information so that we can make a decision and we’re in the business of decision-making,” Geselbracht said.
Thorpe’s motion to refer the discussion to the committee level failed 5-4 with Geselbracht, Brown, Hemmens, Maartman and Coun. Don Bonner opposed. Geselbracht’s original motion passed 5-4 with Krog, Thorpe, Armstrong and Coun. Jim Turley opposed.