Episode 149: Scott Stringer, New York City Comptroller
This week's guest is Scott Stringer, New York City Comptroller, the chief financial officer and chief auditor of the city agencies and their performance and spending.
Scott has served in elected positions since the early '90s. He was elected to the New York State Assembly and represented Manhattan's West Side for 13 years. After working in the State Assembly, he became the Manhattan Borough President. He was elected Comptroller of New York City in 2013 and has served in that role ever since. Scott and his team manage the city's $240 billion public pension system. The Comptroller's office recently announced they would be divesting $4 billion from fossil fuel companies to promote clean energy use.
In the episode, Scott explains his role as Comptroller, the recent announcement to divest $4B from fossil fuels, and how that decision came about. We also talk more broadly about the theory of change behind fossil fuel divestment, the path to a green economy, and the role public policy and government play in bringing about a clean energy future.
Great conversation, I hope you enjoy it!
You can find me on Twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded March 5th, 2021.
In Today's episode we cover:
Scott's role as Comptroller, what the Comptroller does
Scott's motivations for putting forth several climate forward policies and initiatives
Scott's approach to divesting from fossil fuels and why that is so important to the clean energy future
The office of the Comptroller's responsibility for public pensions
Whether the decision to divest in fossil fuels was financially or mission driven
Scott's thoughts on ESG and where ESG fit into investors decisions on publicly traded stocks
In addition to divesting, Scott outlines the ways he sees government and public policy putting pressure on fossil fuel companies to focus on clean energy
The biggest blockers to a clean and sustainable grid and where Scott thinks we need to focus
Where resiliency and migration fit into the green economy and the future of our planet
Advice Scott has for those concerned about climate change but aren't sure where to dig in
Links to topics discussed in this episode:
New York City Comptroller Scott M. Stringer: https://comptroller.nyc.gov/
NYC pension funds vote to divest $4 billion from fossil fuels: https://www.reuters.com/article/us-usa-new-york-fossil-fuels-pensions/nyc-pension-funds-vote-to-divest-4-billion-from-fossil-fuels-idUSKBN29U23Q
The Case For Fossil Fuel Divestment: https://www.forbes.com/sites/davidcarlin/2021/02/20/the-case-for-fossil-fuel-divestment/?sh=409d54a376d2
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Hello everyone, this is Jason Jacobs and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help. Today's guest is New York City comptroller, Scott Stringer. Scott was elected to New York state assembly in 1992 where he represented Manhattan's West side for 13 years. In 2006, he became Manhattan Borough president and was elected comptroller in 2013. Scott and his staff oversee the city's 240 billion public pension system. In January of this year, they announced that they would be divesting 4 billion in investments from fossil fuel companies in order to promote clean energy use.
I was excited to have Scott come on the show to talk about that decision, to divest the theory of change there, the role of fossil fuel companies going forward in the clean energy transition, and also just how that transition can come about and the role of federal government versus state government what's happening in major cities around the world and from Scott's seat as New York City comptroller, what he's doing to help the cause. Scott welcome to the show.
Scott Stringer: Well, it's great to be here, Jason. Thanks for having me.
Jason Jacobs: Thanks so much for coming. I have to say one as an entrepreneur for most of my career, definitely out of my element, talking to comptrollers in some of the biggest and best cities around the world. But when I see that you're doing things like divesting to the tune of $4 billion from fossil fuels, and I'm trying to learn about how to be most impactful for climate change. I would be remiss if I didn't jump at the opportunity to learn more about it and have you on the show. So thank you.
Scott Stringer: Well, thank you very much and by the way, the feeling is mutual. It's great to be able to come to a podcast and have a conversation about the future of the planet, even though we're in the midst of a pandemic, I'm really glad to be here with you. I know people tune in and people are very worried like you and I are about the future of this planet and our children. And it's a very important issue.
Jason Jacobs: So for starters, what does a comptroller do?
Scott Stringer: Well, that's a good question. And it's a very interesting office because this job does a lot of things at the same time. So first and foremost, I'm the chief financial officer for the city. What does that mean? We look at the economic forecasting of our budgets, we do budget analysis. I'm also the editor in chief. So I keep city hall, honest. We look at city agencies, we rule out waste, and we also make recommendations about a more just economy. I've registered 30,000 contracts, so there's a review process for that. And in addition to all of that, we also bond out our money in different ways, working with the mayor's office. So there's a collaboration with the mayor's office.
Sometimes we're on opposite sides, but sometimes we work together for the good of the city. But one of the most important jobs I have is to protect the retirement security of 350,000 city workers. And another 300,000 that are actually retirees. And I do that through managing the fourth largest public pension fund in the United States and 14th largest in the world. That's the New York city retirement system and its revenue worth is now $240 billion. So when you put it together, it's an office with a $100 million dollar budget, 780 employees. I've loved every minute of it. And obviously believe very strongly that this office can do a lot of good for New York city and the larger world we live in
Jason Jacobs: My next question could I have a lot of questions about from what you just said about your work and what you do and the different initiatives, and we'll get to that, but I have to start somewhere else, which is that you did this bold move really first of its kind in terms of divesting to that scale from fossil fuels, but that's not the only thing you've done. There's been a number of forward thinking policy initiatives that you've put forth as it relates to climate and equality and transportation and sustainable cities and things like that. So before we get into any of that, I need to ask, where does that come from? Is that strictly dollars and cents or how does caring about climate change factor into that and when and how and why did you first come upon the magnitude of the problem that we're facing?
Scott Stringer: One of the things that I felt when I got elected comptroller was that it was the elective office that if used responsibly and used in a forward thinking way, you could really have a profound impact on my constituents. And so when we got elected, we started to look at the boardrooms of this country, all of the big corporations that basically have boards and people in the C-suite that look like you and me, white guys, who've long run the economy of the world. And I felt that we could leverage our standing with the pension fund to create more opportunities, to make diversity, a central theme of our investment strategy. And that began a national campaign to get more people of color in the C-suite and the corporate board level and people listen to you when you have the fourth largest public pension fund in America. And we leveraged that, but we also did it not just through the lens of what is the right thing to do and the civil rights issues of our time.
We also know that when you have diverse people at the corporate board level, smart decisions are made, because people on these boards, everyone looks the same, went to the same schools, grew up in the same communities, then people are more likely to suffer from group think. And when we have more people of color, more women on corporate boards, there are different perspectives. And that means a company will be strong. That's what I believe in and by extension, if I'm investing in companies that have more diversity that I'm doing right by the people who entrust me with their time and security. So that was one of the leading issues that we started to think about when I got elected seven years ago, and then a number of ways we move the needle on climate change was for us to fight for more scientists on these fossil fuel boards or on Exxon.
And we did a lot of votes with the voting, from what progressive resolutions during proxy season. And a lot of people like Bill McKibben and others started to come to me and say, this has taken too long. And I said, well, this is what we do. We have these corporate board meetings, we introduced resolutions, we move the needle. And a lot of the advocates came to me and said, there's only one way we're gonna force this issue and save the planet. And that is by initiating a historical fossil fuel divestment strategy. And that is what we worked on for the last couple of years.
Jason Jacobs: Now we of course need to get off of fossil fuels as quickly as possible. And I know there's considerations, of course, in terms of things like energy, poverty, and grid stability. And I mean, we rely on energy, whatever the source to power our way of life. But one distinction is how do you think getting off of fossil fuels versus divesting from fossil fuel companies given that so many of them are at least using the words that they're starting to invest in more green initiatives and more clean initiatives.
Scott Stringer: And good for them and good for the companies that are doing that. But I think you have to take a two-pronged approach. I think you have to be adamant that we're not gonna continue to invest in the fossil fuel infrastructure in this country and around the world and that has to be the marker. I believe that these are gonna be stranded assets. The economy reflects that when we looked at our fossil fuel divestment, we didn't just do it through the lens of climate change, we did it through the lens of are these smart investments will investing in fossil fuel companies and oil companies and the [inaudible 00:09:40] pension fund, or is there a way to segue out of them before it's too late, we hired two independent firms because we didn't wanna mix our ideology with our fiduciary responsibility. I'm proud to tell you that the advisors we had came back and said, this is the responsible way you can do it.
And we think we can get to $4 billion. That was enough for our trustees to vote for this divestment, but you're right, Jason, that's one part of it. The question is not only what we divest from, but what do we invest in? And as we're the vesting from these fuels, we're also investing in the green economy. And that is gonna be key because we have got to look at, and it's not just the pension fund, we have to retrofit our buildings. We have to create real resiliency plans for 520 miles of shoreline in New York City. We're looking at solar energy, electric batteries, there's all kinds of technology that's coming into mainstream America. And we have to take advantage of it to build a cleaner and safer cities. And I think New York City should be at the lead of that.
You know one of the things I wanted to do with our mayor, but he didn't really have an interest, but as a financial advisor, I wanted to have green bonds and blue bonds as part of our capital plan, because I do think there's investor interest around the world to invest in the green economy. And we have to have a mechanism to do that. I do think green bonds and blue bonds will be investor driven and that will also help us invest in the green economy.
Jason Jacobs: And when you think about that decision to divest, especially given that you have so many pension holders, as you said, and protecting their livelihoods and what they've worked so hard for, how much of the decision to divest was purely a financial one and how much of it did come from a place of mission and set a different way. If someone didn't give a crap about the future of the planet and they were only looking at just the financial returns for those pension holders, would they make the same decision?
Scott Stringer: I think that there's balance. I look first and foremost, that you really are in my position, you are responsible for the retirement savings of somebody who works a lifetime for our city, frontline workers, people who are fire of people, police people, city workers. These are folks that entrust me in our office to make sure we get a rate of return. We hit our 7% actuarial return so that they can have financial security. So this is a very big responsibility. It is important though, to factor in climate change and other ways that we can be good to the broader community. And when you can do these things without sacrificing the integrity of the pension fund, you gotta go for it. And it wasn't just this wasn't my first divestment. We divested a couple years earlier from the private prison industrial complex with the, with the first pension fund first comptroller in the country to divest from these private prisons.
People were investing in them making money off the misery of others. These private prisons were ice detention centers during the Trump administration. And we pulled our holdings from these investments because they go contrary to everything we believe in. And I also think ultimately these are not going to be profit making institutions, as people start to realize how tragic they are. And so these have been the bold ways the pension fund and the labor trustees have come together to protect or times carry, but also to reimagine or imagine what a progressive investment strategy could look like.
Jason Jacobs: Well, that is a great lead in. So if I believe in the things that you just said, and let's say I'm a retail investor, trying to make my decisions on publicly traded stocks, if I'm motivated by climate change and I wanna do better, what do you think about ESG and where does that fit in?
Scott Stringer: I'm not gonna give people financial advice. I wouldn't recommend [inaudible 00:13:50].
Jason Jacobs: Let's say I manage a large pension then, [laughs].
Scott Stringer: I think all of these are factors that have to be considered to get the rate of return that you want. And look as a pension fund, we're a little different. We take the long view of what our target investment is. We don't try to beat the system. So our strategy is not in and out of stocks in and out of bonds, trying to guess the market, we have a very balanced asset allocation that allocation is voted on by our trustees and then we hold to it. And I can tell you, you know, it's my last year as city comptroller, but over the past seven years, we've actually hit a 9% return rate, which in my line of work is pretty good. And we've done it and we've been socially responsible and breaking new ground. And so I'm feeling a sense of pride for all the people in the office that have worked so hard to make this happen.
But if I'm somebody out there, I do think putting aside the pension fund, I think there's a generation of people now who don't just want to invest for the sake of investing and getting the highest rate of return. I do think people who are in the market also take responsibility for the kind of things that we're gonna support. And there is a lot of people who care about ESG and who care about climate change and the criminal justice system. I also think people care very much about diversity on corporate boards. We cannot have only all male stele [inaudible 00:15:21] boards it doesn't work, in corporate America we have to change that. And the way we do that is through these kind of initiatives
Jason Jacobs: And clearly from your actions, you believe that divesting is a good thing and will put pressure on fossil fuel to get them to reform faster. How else do we put pressure on fossil fuel to get them to reform faster? What is the role of, let's say government and policy, for example, and I'll ask that both at the federal, but also at the state or even the city level.
Scott Stringer: I first think that urban America has to be at the center of climate change and that is how I approach it. I believe that we should have a total moratorium on fossil fuel infrastructure investment. I think we should be shutting down peaker plants and dirty [inaudible 00:16:03] depot stations because the health and welfare of the people who struggle the most to live in these communities, get those facilities cited in their community. And that is at the crux of what environmental racism is all about. When city government makes decisions to put bad facilities or dangerous facilities into the poorest communities in the city I got a problem with that. And I think we're all coming to terms with that. And we saw that with COVID, COVID struck at the heart of New York City, but it's struck the most vulnerable communities.
My mother died of COVID in a Bronx hospital and the doctor there said to me, you have to understand this is not just a disease or a virus that is killing people like your mom, who was 86 years old. In the Bronx the people coming into our hospital and dying are black people in their 40s, Latino people in their 50s, people who had type 2 diabetes, people who had asthma, obesity. These were illnesses that government was satisfied with managing in poor communities, but not really preventing these things from happening. I think the lesson of COVID is we now see what happens when we let communities wallow without a strategy for a clean economy and clean communities from environmental perspective. So we can't let this happen again. And the way we do it is [inaudible 00:17:28] a combination of things. We divest from what's bad. We stopped these pipelines. We stopped this frack gas, we create a different way of living. We invest in solar and in batteries.
We have a wonderful program for Rikers Island, which is a big prison in New York City. And there's a great council member [inaudible 00:17:46] who has a vision for a renewable Rikers Island to build clean energy capacity. This is all gonna happen in the next 30 years. And let me just say Jason, 'cause you know, economics, this is gonna be a multi, multi multi-billion dollar economy. I would argue that the green economy is gonna be the next industrial revolution. Only it's gonna be a whole lot cleaner,
Jason Jacobs: I guess one challenge that it seems we've got and again, I'm no expert, I'm just trying to piece it together, but that we rely a lot on things like coal and natural gas for the baseload power, even to power the renewables. And so if we were to, for example, ban fracking and ban natural gas, then either it would mean we'd need to embrace things like nuclear, or we would have serious problems with grid stability that then affect the performance and people's livelihoods and the food people eat and things like that. So how do we navigate that and where are the biggest blockers, if any?
Scott Stringer: I'm not an expert on some of these energy issues and how we build that specifically, but I can tell you that our aspirational goal has got to be to reduce these dirty peaker plants, to ban fracking, and to recognize that building huge pipelines that will carry the natural gas is pretty foolish when you think about what we should be doing long-term, which is solar and batteries and what are you gonna invest in that's real. And I would argue from an environmental perspective, let's get on with doing what we have to do. The other thing is, I think there's an urgency now, as it relates to climate change, when we saw hurricane Sandy, this was the episodic event that occurs every 250 years. But every scientist you talk to says, no, this is actually gonna occur every eight years or every 10 years. So we don't have a lot of time to put in place a different kind of, in environmental economy because we've got to solve this problem now, we have run out of time.
I got married late [inaudible 00:19:46] an older dad. I have a nine-year-old and seven-year-old then, which is a whole nother podcast. And, [laughs], and what are we doing this for? It's not for our generation. We're okay, but I sometimes look at my two little guys. I know that this is gonna be something that impacts their lives. So on a personal level, I think parents like myself, I think for me, I want my kids to know that their dad was in the fight. We didn't give them this city or this planet and say, well, you take care of all the things that we wouldn't take care of. I think there's a lot of people say, no, no, this is our responsibility and this is happening on our watch.
Jason Jacobs: And where do things like resiliency fit in? And I mean, I hate to say it, but what about migration as well like do you think we're gonna need to consider that in- in some cases?
Scott Stringer: But I think New York City, especially as we come back, we'll always be a magnet for people around the world, new immigrants, people from there's so many kids who still grow up believing and thinking that somehow they're gonna come to the city. And obviously the role of government is to get everyone to come here and to build an economy for everyone and to have a city that people can afford to live in and raise their families. And so I think that's exciting, but what will keep people coming here is knowing that we have a resiliency plan, knowing that we're gonna protect our people from the next great storm, knowing that we're also going to be active in the green economy. 'Cause that's where the jobs are gonna.
So there's a lot that goes into being an elected official or a municipal elected official to start thinking about this. And I don't think it's just New York. I think the major cities in the United States, this is a great opportunity to rethink what will cities look like? How will they derive their energy sources? How will we feed the population? How will we create a different shoreline? This is all gonna be the challenges over the next 20, 30 years.
Jason Jacobs: And last question is just the MCJ or My Climate Journey audience, people listening are people of all different shapes, sizes, backgrounds, geographies, function, skill sets, seniority levels, et cetera, they're all are deeply concerned about climate and trying to figure out how to help. So just speak to them for a minute. What parting words you want them to hear as we wrap up this discussion.
Scott Stringer: First of all I think it's great to be on a podcast that is dedicated to these issues and people are listening and learning every day. And so Jason, thank you for creating this space to talk about these issues 'cause a lot of it is about education. A lot of it is about learning about investment strategies that relates to these issues. So I think that's critical. I also think there's a lot of advocacy organizations from 350.org to food and water watch so many organizations that are really dedicated people raising these issues, whether it's a protest, rallies or just holding elected officials accountable.
I do think for people who want to participate in government, the candidates that speak to these issues of climate change, I think will resonate with their future voters. We have to start electing I think you said at the beginning of the show, we also have to start electing people who are devoted to these issues and not about the status quo. And that is tough because remember these energy companies, these fossil fuel industry, people have a lot of power in this country. They're not afraid to use it. I remember when I started our divestment strategy, the pushback we got from them. So we have to be strong and resilient politically if we're gonna see real change in this country.
Jason Jacobs: And the fossil fuel providers are where we get our energy today, what percentage of the places we get our energy today, I don't mean the sources, but the companies do you think will be the ones that power where we get our energy tomorrow.
Scott Stringer: I think that companies will start to segue to the green economy and start to recognize this will be here 20, 30 years from now. I think the ones that don't will not be, I do think again in corporate America, we do need to see change. We must have not just more diversity, more women and people of color, but we also to have more ideas, bigger, bolder ideas about how we think about the economy, how we invest in urban America and the people who are in front of that will be in strong positions to be leaders, both in the business community and in the political world we live in.
Jason Jacobs: That's a great point to end on. Scott thanks so much for your bold leadership in this area and thank you for coming on the show.
Scott Stringer: Thank you. Jason this was great.
Jason Jacobs: Hey everyone, Jason here, thanks again for joining me on my climate journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note, that is .co not .com. Someday we'll get the .com, but right now .co. You can also find me on Twitter at Jay Jacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that, thank you.
