While other communities have “committed” to divest fossil fuel stocks, Cooperstown, NY actually made the switch. After a unanimous “yes” vote, the village exited the S&P 500. Instead, they are moving pension money to a State Street S&P fund that excludes coal, oil and gas producers.
The result was an ethical debate.
One side said the new investing philosophy would save humanity. The opposing group believes their fiduciary duty is the highest return. On one side we have the planet. On the other, the wellbeing of the Cooperstown police and firefighters.
On each side, we also have knowledgeable individuals. A retired Exxon Mobil executive leads the group that supports the initiative. Disagreeing, we have an asset manager who was assistant counsel for the NYS pension fund. The town tax collector and the town treasurer also oppose divestiture. Meanwhile in the middle, the Cooperstown mayor was an options trader.
The local newspaper report:
Our Bottom Line: Tradeoffs
Although the Cooperstown debate focuses on investing, it’s really about an ethical tradeoff. Yes, you might be helping the planet. But you could be sacrificing support for your firefighters and police force. Right now, the new State Street fund is lagging the S&P 500 index.
All of this returns us to the heart of economics. There is never a free lunch.
Our sources and more: While the NY Times alerted me to the Cooperstown decision, the local news provided more insight. In this brief broadcast and the local newspaper, you can see more of the real debate.