New York State’s $226 billion pension fund moves to divest from oil and gas companies
NEW YORK — On Dec. 9, New York State Comptroller Tom DiNapoli announced that the $226 billion New York State Common Retirement Fund is moving to divest from the riskiest oil and gas companies by 2025 and decarbonize by 2040.
New York’s announcement is the biggest leap forward worldwide on climate finance action in 2020, an otherwise bleak year for the planet. It creates the most comprehensive program of any large public fund worldwide to divest from fossil fuels, decarbonize across a massive portfolio, and put major financial pressure on public companies, such as auto corporations and utilities, to align their operations with the scale of climate action needed to stave off worldwide catastrophe.
The victory comes eight years after New Yorkers launched the #DivestNY campaign, days ahead of the fifth anniversary of the Paris climate accord signing, and sets the bar for climate finance action ahead of COP26 next year in Scotland.
DiNapoli is taking a ground-breaking, systematic approach to reviewing and assessing each fossil fuel company sub-sector, with a process grounded in fiduciary responsibility. The results of the first review, targeting the coal sub-sector and completed earlier this year, resulted in divestment from 22 coal companies. Similar divestment action is anticipated from the current tar sands review, which is set to conclude next month. After the tar sands review, the comptroller will review fracking companies, oil majors, fossil fuel service companies, and oil and gas transportation and pipelines. All reviews and divestment actions will be completed by 2025.
The news fell on the happy ears of Sister Eileen O’Connor, RSM, who, with the Interfaith Climate Justice Community of WNY, has been working with DiNapoli’s office for years to see how the pension funds may be reallocated. She also looked at her own order’s investments to make sure they are investing in environmentally sound organizations. It’s known as Socially Responsible Investing.
“It’s been a legislative effort through our state senate and assembly. It’s been many different organizations (involved), certainly a huge number of faith-based organizations including the New York State Council of Churches. We worked with them as well,” Sister Eileen said.
The Interfaith Climate Justice Community was formed in 2015 by Sister Eileen andRoger Cook in response to Pope Francis’ encyclical “Laudato Si.” It seeks to develop relationships with various religious groups to care for the earth from a spiritual perspective.
DiNapoli’s announcement, just like New York City’s 2018 five-year plan to divest its massive pension funds from fossil fuels, is expected to reverberate globally, boosting divestment and climate finance campaigns across the nation and around the world. The commitment to decarbonize the fund by 2040 is 10 years sooner than any other U.S. pension fund. This plan also includes interim trajectory goals, rigorous reporting, staff hiring, and transparency.
NYS-CRF historically has held over $12 billion in fossil fuels, including more than $1 billion invested in ExxonMobil alone. Divestment will ensure that the NYS fund will end such financing.
The #DivestNY coalition, composed of over 40 groups, won this campaign through focused and diligent campaigning over many years. The campaign demand launched after Superstorm Sandy devastated the Northeast in 2012, costing nearly $70 billion in damages.
The #DivestNY coalition will continue to work alongside DiNapoli, the expanding team at the comptroller’s office working on climate finance, and public officials at all levels to ensure this commitment, its benchmarks, and a fossil free world become reality.