In a major coup for divestment campaigners, state governor Andrew Cuomo and NYC comptroller Scott Stringer set out plans to halt pension investments into fossil fuels
New York has yesterday unveiled major plans to divest the state's public pension fund from "significant" fossil fuel investments as part of a plan to shift the investment of public money in action to tackle climate change.
The landmark move would ensure the New York State Common Retirement Fund (NYSCR) - which with $200bn in assets under management is the third largest in the US - would cease all new investment in significant fossil fuel-related activities.
Cuomo said he would set out more details in his 2018 State of the State address, but for the plan to take effect it will need the approval of state treasurer Tom DiNapoli.
Governor Cuomo also announced plans to work with DiNapoli to create an advisory committee of "financial, economic, scientific, business and workforce representatives", who will create a decarbonisation roadmap detailing how the NYSCR's funds could be used to accelerate climate action and support the clean tech economy.
Impossible to overstate how big today's divestment wins are. New York won't divest overnight but the signal Cuomo and Stringer have sent change the game. New investments in fossil fuels are now clearly irresponsible for institutions— Bill McKibben (@billmckibben) December 20, 2017
Despite a major push for clean energy development in New York, the NYSCR is still heavily invested in fossil fuels, with holdings in more than 50 of the world's most carbon intensive oil and gas companies. Investments include $1bn invested in oil giant Exxon Mobil alone.
"Moving the NYSCR away from fossil fuel investments will protect the retirement savings of New Yorkers," Governor Cuomo said. "This proposal lays out a roadmap for New York's $200bn Common Fund to take responsible steps to divest from its fossil fuel holdings, leading to a more secure retirement fund for countless New Yorkers while also helping to achieve the state's clean energy goals."
In a parallel move, the comptroller of New York City Andrew Stringer also yesterday announced plans to urge the trustees of the New York City pension fund to decarbonise the portfolios. Stringer said his proposal would include asking the trustees to consider stopping new investment in fossil fuels, divesting current holdings in fossil fuel companies, and boosting investment in clean energy.
"I will work with our trustees to review any and all proposals that will safeguard the pension funds," Stringer said in a statement. "As Comptroller, I will continue in my fiduciary duty to protect the fiscal health of the City and the retirement security of our City workers and beneficiaries."
Together the announcements cover investments worth $390bn, and round up a monumental fortnight for divestment campaigners.
Earlier this month the World Bank revealed ground-breaking plans to halt funding for upstream oil and gas projects from 2019, to bring its lending practices more closely in line with the goals of the Paris Agreement. On the same day, insurance giant AXA said it would quadruple its 2020 green investment target to €12bn ($14.3bn) by 2020 and increase its coal divestment fivefold to €2.4bn ($2.9bn), while Dutch bank ING said it would no longer finance clients in the energy sector that are more than five per cent reliant on coal fired power in their energy mix.
Meanwhile, this week UK pension authorities eased pension investment rules to allow Britain's £2tr workplace pension schemes to dump their shares in oil, gas and coal companies more easily, in a move many expect will empower them to take bolder investment decisions to fight climate change.
And finally, just yesterday the French Parliament passed new legislation banning all oil and gas exploration in the country by 2040, the first nation in the world to do so. French President Emmanuel Macron said he was "very proud" of the move.
The moves all underscore the growing reputational, financial and operational risks governments and investors are associating with fossil fuel assets, and the increasing attractiveness of an economic strategy founded on low-carbon technology.
World's largest brewer promises 100 per cent renewable electricity, 100 per cent recycled packaging, and 25 per cent cut in CO2 emissions by 2025
Climate Bonds Initiative launches new campaign, as EIB confirms plan for $100m green bonds investment push
Experts reveal their top tips on how to start implementing the FSB's climate risk disclosure guidelines across your business
AECOM's Robert Spencer warns that businesses deploying circular economy models need to remember to make the case for the approach, even once it is successfully up and running