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The state treasurer Thursday called for Massachusetts’ $98.5 billion pension fund to be used as a weapon in the fight against climate change, recommending that the fund’s managers pressure companies to cut emissions and take other measures to comply with world climate goals.

Legislators and activists have been pushing the state to divest its funds from fossil fuel companies for nearly a decade, which other public pension funds have done in recent months, including New York and Maine and the Canadian province of Quebec. On Wednesday, Boston’s City Council voted to divest all city funds from fossil fuels.

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But the proposal from state Treasurer Deborah Goldberg calls for a different approach.

The proposed rule, which will be voted on by the pension fund’s board in February, draws on a history of shareholder activists who pressure companies from the inside, treasury officials said. And using the leverage of all the state’s investments rather than withdrawing funds from selected ones, Goldberg said, can influence significantly more companies, reflecting the broader physical and financial risks posed by climate change.

In short, if a company fails to align its business plans with the goal of limiting global warming to 1.5 degrees Celsius above preindustrial times or achieving net-zero emissions by 2050, the state’s Pension Reserves Investment Management board would vote against the company’s slate of directors at its annual shareholder meeting.

“In general, treasurers and fiduciaries . . . are beginning to see this as a business risk to organizations, to real estate development, all across the spectrum of what we tend to invest in,” said Goldberg, who chairs the state pension fund board. “The 100-year storm that now happens twice a year. All sorts of things: Excessive hurricanes, rising waters. What we would like to do is put a little bit more teeth into our proxy voting guidelines and be forward thinking.”

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The treasurer’s office is working on the plan with the advocacy group Climate Finance Action, whose cofounder, Mary Cerulli, said the approach is “much more powerful” than simply divesting, since fossil fuel investments represent just 2 percent of the fund. Leveraging broader shareholder power, she said, will “cover a much bigger portion of the $95 billion pension portfolio that we have.”

The proposed move in Massachusetts comes as states and countries are recognizing the enormous potential of using financial levers to provoke climate action. Worldwide, pension funds manage more than $46 trillion in assets, according to the advocacy group Climate Safe Pensions Network. In the United States, some $5.1 trillion in state pension funds are invested in public companies, private equity holdings, and other investments, Cerulli said.

The announcement also comes on the heels of the United Nations climate conference in Glasgow, where the number of asset managers pledging to achieve net-zero by 2050 or sooner via an initiative known as Net Zero Asset Managers nearly doubled to 220 investors, representing $57.4 trillion in assets.

What that adds up to is a lot of power; it’s just a question of how to wield it.

“This is the long debate between ‘engagement’ and ‘divestment,’ ” said Bill McKibben, a leader of the divestment movement, who said that the proposed rule in Massachusetts is a flawed approach. “Engagement is usually used as a cover by those who don’t want to divest; it’s not proved an effective tool in any way in dealing with the fossil fuel industry.”

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He pointed to a fossil fuel industry website, DivestmentFacts.com, that aims to convince investors not to divest, but to stay and engage instead — evidence, he said, of how little the industry wants to see the divestment movement gain steam.

Across the country, state pension funds are approaching their shareholder power in different ways. At the same time that some states are moving to divest, pension funds in Illinois, Connecticut, and Vermont have taken similar approaches to what Goldberg is proposing for Massachusetts.

There is some recent precedent for shareholder action on climate being effective: In May, a small, activist hedge fund managed to unseat at least two ExxonMobil Corp. board members in an attempt to force the company to align its business with fighting climate change.

A report released in September by the proxy advisory firm Institutional Shareholder Services on climate change and proxy voting found that in 2021, instead of simply demanding that companies disclose climate vulnerabilities — a common request from shareholders in the past — investors are increasingly voting against directors for failing to adequately mitigate climate risk.

A push by an organization called Majority Action, which helped orchestrate 19 climate-related campaigns against directors in the electricity, oil and gas, and banking sectors, ultimately did not have an overall significant impact on the vote, according to the report. But what happened at Exxon, the report’s authors wrote, “suggests that seeking to hold companies and specific directors accountable for perceived failures of climate-related risk management could be a tactic used again in the future.”

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As a result of the climate votes in 2021, oil and gas directors targeted by the campaigns saw their support drop by 6 percent, said Lisa Lindsley, director of investor engagement at Majority Action. “We believe that 2022 is going to be the moment when this type of proxy voting will become mainstream,” she said.

In Massachusetts, Goldberg said the proposed rule “puts companies on notice that they’re going to be risking their business models should they not be thinking along these lines.”

Goldberg, who said she is “not a fan of divestment,” said this approach also allows the fund managers to play an active role. “I think that if you don’t have a seat at the table, you don’t have a seat at the table.”

Former state senator Ben Downing, who in 2013 wrote the first bill to divest the state’s pension fund, said the issue shouldn’t be reduced to a choice between divesting or leveraging the shareholder-activism potential of pension fund.

”I think it ought to be an and/both,” said Downing, who is running for governor in the 2022 Democratic primary. “We have to work from both the inside and the outside.”

That’s the approach being taken in the Netherlands, where in October the country’s biggest pension fund announced it was divesting from fossil fuels. In making the announcement, fund manager Corien Wortmann said, “We part with our investments in fossil fuel producers because we see insufficient opportunity for us as a shareholder to push for the necessary, significant acceleration of the energy transition at these companies.”

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But, she added, the fund would continue to invest in major fossil fuel-dependent industries — energy producers and the automotive and aviation industries — and use its shareholder clout to force those companies to become more sustainable.

Deb Pasternak, director of the Massachusetts Sierra Club, was among those applauding Goldberg’s announcement. “Using the enormous shareholder power of the state pension fund as a lever sends the strong and clear message that Massachusetts is serious about systemic climate risk and the injustices it causes to our residents,” she said.


Sabrina Shankman can be reached at sabrina.shankman@globe.com. Follow her on Twitter @shankman.