The District of Columbia Retirement Board is the latest body to move toward divestment from oil and natural gas, prompting a warning from the American Petroleum Institute (API), which has called the trend a "knee jerk" reaction that could have a negative effect on long term values.
The D.C. Retirement Board is not the first group to drop fossil fuel investments. Earlier in the year, New York City opted to drop coal from its retirement fund portfolio.
The Rockefeller family, whose origins of wealth come from oil, has called for fossil fuels to remain where they are to protect the planet.
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UPI notes that Exxon in particular has drawn the ire of fund managers following a subpoena by the New York Attorney General's Office in the wake of reports that the company had mislead investors about environmental impacts.
In response to the move by the Retirement Board, API vice president of economic policy Kyle Isakower commented that divesting from energy stocks would result in lower investment returns, a move which he said is "not in agreement with their fiduciary responsibility."
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The Institute contends that despite lower energy prices, the U.S. remains a global leader in oil and gas production, adding that the moves to divest may be "short sighted."
In April of this year, Stanford University bucked the divestment trend and voted to keep its energy holdings. The school said that it is "engaged" in alternative energy sources, but recognized that oil and gas are still key parts of the global market.
By Lincoln Brown for Oilprice.com
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