New York’s $226 Billion Pension Fund Is Dropping Fossil Fuel Stocks

Anne Barnard

NY Times

Dec 9, 2020

New York State’s pension fund, one of the world’s largest and most influential investors, will drop many of its fossil fuel stocks in the next five years and sell its shares in other companies that contribute to global warming by 2040, the state comptroller said on Wednesday.

With $226 billion in assets, New York’s fund wields clout with other retirement funds and its decision to divest from fossil fuels could accelerate a broader shift in global markets away from oil and gas companies, energy experts and climate activists said.

The announcement came months after the fund moved to sell its stock in 22 coal companies. New York City, San Francisco, Washington and several smaller cities have also adopted fossil-fuel divestment programs, but New York State’s commitment to an even more sweeping plan is more significant, especially given the state’s centrality to the global financial markets.

The state comptroller, Thomas P. DiNapoli, had long resisted a sell-off, saying that his primary concern was safeguarding the taxpayer-guaranteed retirement savings of 1.1 million state and municipal workers who rely on the pension fund.

But on Wednesday, Mr. DiNapoli signaled that his main reason for adopting the new plan now was his duty to protect the fund and to set it up for long-term economic success in a world that is moving away from fossil fuels.

“New York State’s pension fund is at the leading edge of investors addressing climate risk, because investing for the low-carbon future is essential to protect the fund’s long-term value,” he said in a statement.

Mr. DiNapoli said the fund would drop stocks that do not meet new standards requiring them to show “future ability to provide investment returns in light of the global consensus on climate change.”

With the plan, New York State’s fund has taken a prominent role in a movement that is growing around the world, with pension funds in the United Kingdom, Ireland and Sweden adopting divestment plans. António Guterres, the United Nations secretary general, has urged governments, foundations and universities to follow suit.