Goodbye to fossil fuels, says one major US pension fund: they’re no good for either the climate or the economy.
LONDON, 17 December, 2020 − In what’s being billed as “the biggest leap forward worldwide on climate finance action this year,” a major US pension fund has announced plans to move its money out of fossil fuels.
The New York State Common Retirement Fund has a portfolio of $226 billion worth of investments under its control. A substantial portion of that cash pile has been invested in the fossil fuel industry, including more than $1bn in the oil giant ExxonMobil.
Tom DiNapoli, the New York State comptroller, who oversees the state’s fiscal affairs, said the retirement fund was pulling its money out of fossil fuels not only for the good of the climate: the move also made financial sense.
“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”, said DiNapoli.
“Divestment is a last resort, but it is an investment tool we can apply to companies that consistently put our investments’ long-term value at risk”
“We continue to assess energy sector companies in our portfolio for their future ability to provide investment returns in light of the global consensus on climate change. Divestment is a last resort, but it is an investment tool we can apply to companies that consistently put our investments’ long-term value at risk.”
The fund is the third largest public pension fund in the US, investing on behalf of more than a million past and present state and local government employees. Under the fund’s plan, investments in what’s termed the riskiest oil and gas companies will be withdrawn by 2025: by 2040 the fund aims to have no money invested in companies associated with climate-changing greenhouse gas emissions.
It says it has already withdrawn investments in more than 20 coal companies. Earlier this year, the last remaining coal-fired power plant in New York State closed.
The fund is now reviewing its investments in tar sands projects and plans further analysis of its financial holdings in fracking companies, fossil fuel service groups, oil and gas transport companies and pipeline operations.
Climate activists in New York State have been among those at the forefront of what’s grown into a global campaign aimed at persuading investors to withdraw their money from the fossil fuel industry.
In 2012 Hurricane Sandy hit the Caribbean, the east coast of the US, and Canada. In the north-east of the US alone more than 60 people died, and the overall cost of the damage caused was estimated at more than $70bn.
In the aftermath of Sandy, a coalition of various organisations, including 350.org, was formed with the aim of persuading institutions – from religious groups to universities to sovereign wealth funds – to withdraw investments in fossil fuel enterprises.
Other organisations, such as the UK-based Fossil Free group, have boosted what is now a worldwide fossil fuel divestment movement, which has successfully campaigned for several trillion dollars’ worth of investments to be withdrawn from the fossil fuel industry. − Climate News Network
Our daily service
Climate News Network is a free and objective service publishing a daily news story on climate and energy issues. Sign up here to get our latest articles sent straight to your Inbox.