The New York State Common Retirement Fund (Fund) will restrict its investments in eight integrated oil and gas companies, including Exxon Mobil Corp., after a review of the companies’ readiness to transition to a low-carbon economy, State Comptroller Thomas P. DiNapoli, trustee of the Fund, announced today.
The evaluation of the Fund’s integrated oil and gas holdings is part of DiNapoli’s broader review of the transition readiness of energy sector investments that face significant climate risk. With today’s announcement, the Fund will be divesting its corporate bonds and actively managed public equity holdings in eight integrated oil and gas companies that it has determined are not transition-ready. In addition to Exxon, the companies to be divested and restricted in the coming months are Guanghui Energy Company Ltd., Echo Energy PLC, IOG PLC, Oil and Natural Gas Corporation Ltd, Delek Group Ltd., Dana Gas Co and Unit Corp. The value of these holdings is approximately $26.8 million as of Dec. 31, 2023.
DiNapoli also announced the Fund has met its initial goal of committing $20 billion to the Sustainable Investments and Climate Solutions program, and has set a new goal of investing $40 billion in that program by 2035. With the program, the Fund invests in sustainable investments including clean energy generation, energy storage, resource efficiency, and green infrastructure across all asset classes. As part of the expansion of this program, DiNapoli also announced the Fund would increase its climate index investments by 50% to over $10 billion over the next two years, with the longer-term goal of doubling it by 2035.
“The New York State Common Retirement Fund is a recognized leader in addressing climate-related investment risks and pursuing opportunities in the growing low-carbon economy,” DiNapoli said. “Climate change is an increasingly urgent risk facing all investors, and I am determined to protect the state’s pension fund by keeping it at the forefront of efforts to mitigate risks to our investments. This reduces our fund’s exposure to fossil fuels. Consistent with my fiduciary duty to maximize investment returns for the benefit of our members and retirees, these actions should help accomplish the goals of our Climate Action Plan.”
Today’s actions are part of DiNapoli’s comprehensive Climate Action Plan to mitigate investment risks posed by climate change and ultimately transition the Fund’s investment portfolio to net zero greenhouse gas emissions by 2040. In 2023, the Fund updated its assessments of shale oil and gas, oil sands and coal companies, resulting in restrictions on investment in a total of 50 firms that the Fund determined failed to demonstrate transition readiness, including six new coal companies and four new shale oil and gas companies.
With the initial review of energy companies’ transition readiness now completed, the Fund’s reviews will cover other high impact sectors as identified by the Taskforce on Climate Financial Disclosure. In the next phase, the Fund will focus on major utilities in the United States — companies that are among the highest emitters of greenhouse gases, but also potential leaders in developing climate solutions.
DiNapoli also announced the Fund would make no new private market investments in funds focused on the extraction or production of oil, gas and coal and modify its proxy voting guidelines to push for public companies to increase disclosure of their climate transition plans, risks and opportunities.
About the New York State Common Retirement Fund
The New York State Common Retirement Fund is one of the largest public pension funds in the United States. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.