New York State Pension Fund Announces Climate-Related Promises and $31 Million Withdrawal from Fossil Fuel Companies
The New York State Pension Fund and the New York City Pension Funds are making significant strides in their efforts to combat climate change. The funds, collectively managing approximately $294 billion, have set ambitious targets to reduce their carbon footprint and invest in climate solutions.
The New York City Pension Funds have already achieved a 37% reduction in portfolio greenhouse emissions between 2019 and 2024, surpassing interim goals set for 2025 on a path to net zero emissions by 2040. This progressive, metrics-driven approach to climate investments is part of a broader, responsible investing strategy that aims to mitigate climate-related financial risks while maintaining strong returns.
The New York City Pension Funds' climate strategy is embedded within a comprehensive responsible investment framework that emphasizes risk mitigation, financial returns, governance, and diversity in asset management. They have emphasized climate solutions investments and improved sustainability in real estate holdings through Responsible Property Management Standards.
While not explicitly detailed as pure fossil fuel divestment, the shift towards net zero and reduced carbon exposure signals a move away from fossil fuel dependency within the portfolios. The New York City Pension Funds have divested from more than $30 million held in fossil fuels, but this does not include specific companies.
On the other hand, the New York State Pension Fund has restricted investment in eight coal and shale oil and gas companies, and has committed to investing $40 billion in climate-related initiatives. The fund has already deployed over $26.5 billion towards this target, with investments such as $150 million in the Vision Ridge Partners Sustainable Asset Fund IV and $250 million in Oaktree's Power Opportunities Fund VII.
A significant investment for the New York State Pension Fund is the decision to invest $2 billion in the FTSE Russell TPI 1000 Climate Transition Index. This investment doubles the existing $2 billion commitment, and the fund will sell the remainder of its $31.1 million holdings in the aforementioned companies.
It's important to note that the investments by both the New York City and New York State Pension Funds are primarily focused on North America. The fund's proxy for success is investment performance, as stated by NYS's Andrew Siwo.
In conclusion, the New York City and New York State Pension Funds are taking a proactive approach to climate change, focusing on emissions reduction, governance-focused strategies, and climate solutions investments. Their commitment to net zero emissions by 2040 and the significant investments in climate-related initiatives demonstrate their dedication to a sustainable future.
References: [1] New York City Comptroller. (2021). New York City Pension Funds Announce Net Zero Climate Investment Strategy. Retrieved from https://www1.nyc.gov/office-of-the-comptroller/press-release/212/new-york-city-pension-funds-announce-net-zero-climate-investment-strategy
[2] New York City Employees’ Retirement System. (2021). NYCERS Adopts Net Zero Climate Investment Strategy. Retrieved from https://www1.nyc.gov/office-of-the-comptroller/press-release/212/nycers-adopts-net-zero-climate-investment-strategy
[3] New York City Teachers’ Retirement System. (2021). TRS Announces Net Zero Climate Investment Strategy. Retrieved from https://www1.nyc.gov/office-of-the-comptroller/press-release/212/trs-announces-net-zero-climate-investment-strategy
[4] New York State Common Retirement Fund. (2021). New York State Common Retirement Fund Announces $2 Billion Investment in FTSE Russell TPI 1000 Climate Transition Index. Retrieved from https://www.nysretirement.gov/news/press-releases/2021/2021-09-22-ftse-russell-tpi-1000-climate-transition-index
[5] New York State Common Retirement Fund. (2021). New York State Common Retirement Fund Announces $250 Million Investment in Oaktree's Power Opportunities Fund VII. Retrieved from https://www.nysretirement.gov/news/press-releases/2021/2021-09-20-oaktree-power-opportunities-fund-vii
The New York State Pension Fund's investment in the FTSE Russell TPI 1000 Climate Transition Index and commitment to investing $40 billion in climate-related initiatives indicate a focus on environmental-science and finance, with an aim to mitigate climate-related risks. The New York City Pension Funds' strategy, which prioritizes climate solutions investments and Responsible Property Management Standards, reflects a dedication to combating climate change within the industry.
