The New York State Common Retirement Fund lost at least $5.3 billion from investments in the top 200 fossil fuel companies, according to a new report from Corporate Knights that supports a divestment argument.
New York State’s $189.4 billion pension fund is the third largest in the nation, following California’s CalPERS and CalSTRS, which are now required by law to divest from thermal coal.
The report on the New York fund's loss comes as politicians, environmentalists and financial experts gather in the state capital for a forum on the Fossil Fuel Divestment Act co-sponsored by New York State Sen. Liz Krueger and Assembly Assistant Speaker Felix W. Ortiz. The bill is the first statewide climate legislation that calls for full divestment from coal, oil and gas.
“The era of fossil fuels is coming to an end, and this report demonstrates very clearly why divestment is not only environmentally sound, but financially responsible,” said Krueger. “By staying invested in fossil fuels over the last three years our state pension fund missed out on over $5 billion in potential returns. Investment in fossil fuels is a sinking ship, and it's high time we headed for the lifeboats."
Meanwhile, New York Attorney General Eric Schneiderman continues to Exxon to determine whether the company lied to the public about the risks of climate change or to investors about how such risks might hurt the oil business.
“New York is a rich state, but perhaps not so rich it can afford to waste billions investing in failing business models — especially when the warming caused by those companies will cost a fortune to deal with!,” said Bill McKibben, co-founder of 350.org. “New York has made bold moves for climate such as banning fracking and phasing out coal-fired power plants, yet the pension fund continues to invest in both of these destructive and outdated extraction practices.”
“Our analysis with the Decarbonizer suggests the New York State Common Retirement Fund's equity portfolio would have been at least $5.3 billion better off had it divested from the biggest oil, gas and coal companies three years ago in favor of companies providing climate solutions,” said Toby Heaps, CEO of Corporate Knights, an investment research company. “This number is a conservative estimate based on the equities side of the fund. The energy transition away from old fossil fuel energy to new clean energy is underway and investors who cling to fossil fuel holdings risk substantial value destruction over the long-term.”