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New York pension fund announces plan to decarbonize by 2040

December 09, 2020

S&P Global Market Intelligence:

The third-largest pension fund in the U.S. announced plans to decarbonize fully by 2040 and begin a four-year review of its energy sector investments for potential divestment.

New York State Comptroller Thomas DiNapoli announced the New York State Common Retirement Fund will set interim goals to reach net-zero greenhouse gas emissions for its entire portfolio by 2040. It is also starting a process to identify companies across the fossil fuel sector for potential divestment by 2025.

“Achieving net-zero carbon emissions by 2040 will put the fund in a strong position for the future mapped out in the Paris Agreement [on climate change],” DiNapoli said in a news release. “Divestment is a last resort, but it is an investment tool we can apply to companies that consistently put our investment’s long-term value at risk.”

DiNapoli’s decision will likely be viewed with respect and prompt further response from the broader investment community, Tom Sanzillo told S&P Global Market Intelligence. Sanzillo is the director of financial analysis at the Institute for Energy Economics and Financial Analysis. While groups focused on a transition from fossil fuels such as the Institute for Energy Economics and Financial Analysis support divestment because it will accelerate change in the energy market, DiNapoli has “done the homework” and sees the financial risks that fossil fuel companies are facing, Sanzillo said.

“This is the voice of reason and experience telling [other institutional investors], ‘It’s time to really make a move because we’re not seeing the changes that we need, both financially and from a climate perspective,'” Sanzillo said. 

[Taylor Kuykendall]

More: NY pension fund sets 2040 net-zero goal, divestment review plan

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