New York Adds $3B to Sustainable Investment Program

Among other steps, the state’s retirement fund—third largest in the U.S.—is committing as much as $6 billion to green investment across asset classes.

New York State Comptroller Thomas DiNapoli announced a $3 billion boost to the New York State Common Retirement Fund’s Sustainable Investment Program, raising its total commitment to $10 billion. The New York State Common Retirement Fund is the third largest public pension fund in the U.S. with assets of $207.4 billion.

DiNapoli, an ambassador for American climate action and the We Are Still In coalition, is addressing material risks and pursuing opportunities for the Fund’s investment since taking office in 2007. The Asset Owners Disclosure Project has ranked the Fund as the top U.S. pension fund and third globally, for two consecutive years.

Sustainable investment plan

DiNapoli’s commitment to sustainable investments integrates key environmental, social and governance principles into the fund’s investments, which include:

  • $4 billion for the low emissions index, which eliminates or reduces the Fund’s public equity investments in companies with high emissions of greenhouse gases and increases investments.
  • $6 billion targeted to sustainable investments across asset classes—i.e. Generation Asset Management, the Rockefeller Asset Management Global Sustainability and Impact Strategy and the Rise Impact Fund
  • LEED Gold real estate investment, green bonds and private equity investments
  • ESG risk assessments for all new investments as well as annual review of ESG oversight of existing investments with an annual carbon footprint analysis of the Fund’s public equity portfolio.

“Climate change poses a significant threat to our investments. Smart, sustainable investments protect the long-term value of the Fund and at the same time can be a powerful tool for helping to address the risk of climate change,” DiNapoli said in a prepared statement. “The current Administration in Washington may have withdrawn from the Paris Agreement, but in New York ‘We Are Still In’ and committed to making the Paris Agreement’s goals a reality. I’m determined to keep New York State’s pension plan well-funded and invested in the emerging low carbon global economy.”

Active ownership

In recent years, the Fund has filed more than 125 climate-change related shareholder resolutions and reached 55 agreements with portfolio companies for them to analyze climate change risks, set GHG reduction targets and renewable energy and energy efficiency goals, prevent deforestation, publish sustainability reports and appoint directors with environmental expertise. It convened an Advisory Panel to identify potential avenues for further decarbonizing the Fund’s holdings.

The Fund also won broad shareholder support for shareholder resolutions by urging major fossil fuel companies, such as ExxonMobil and Duke Energy, to examine how goals of the Paris Agreement will impact their business and to continue to militate for increased transparency on their climate risk plans. Moreover, the Fund has contacted more than 300 companies in the low emissions index, requiring them to publicly disclose their emissions data, while more than 100 companies agreed to disclose this information over the last three years. Last, but not least, it joined forces with investors representing trillions of dollars in engaging corporations to accelerate and expand emissions reductions, enhance risk disclosures and implement sustainable business practices, including PRI, DCP’s Carbon Action, the Climate Action 100+ and CERES, where DiNapoli has served on the Board of Directors since 2011.

“These new, bold sustainable investments will go a long way in helping to make progress against the ambitious objectives of the Paris Agreement and accelerate the low-carbon economy,” added Mindy Lubber, president & CEO at Ceres.