Report suggests fossil fuel divestment by another name
Albany, NY — A long-awaited report released today from New York State’s Decarbonization Panel, suggests the management of New York State $200 billion state pension fund urgently overhaul its investments with new standards to reduce financial risk associated with climate change, and ensure all investments align with and support a livable future in the era of climate change.
On the report, Cata Romo with 350.org Fossil Free New York organizer said:
“There’s no room for fossil fuel investments in a Green New Deal. Call it divestment, call it decarbonization, call it Minimum Standards — this report urges what New Yorkers have been demanding since Superstorm Sandy. Comptroller DiNapoli must divest from toxic fossil fuel companies knowingly perpetuating climate chaos. The litmus test is if Exxon and Peabody Coal are in the portfolio at the end of the day.”
The report rightly recommends a different suite of managers, new investment vehicles and rapid assessment of risk and setting minimum standards to align with the scientific consensus.
The panel also recommends the fund establish criteria for exclusion, called “Minimum Standards” based on the science of 1.5 degrees — requiring a transformative shift off fossil fuels by 2030. This means any coal company building new coal plants, any fossil fuel company drilling new wells, would be excluded.
The recommendations include a strong suggestion to orient the portfolio towards climate solutions — something the divestment movement has been calling on the fund to do for years. Additionally, the report criticizes shareholder engagement without consequences, concluding and suggesting the fund no longer own securities in companies that do not meet and are not making progress toward the “Minimum Standards.”
Former SEC Commissioner and panel member Bevis Longstreth notes, “the risk of the Fund of being too early in decarbonizing is far less than the risk of being too late. And the time is fast approaching when holding FF-Dependent Companies will be as imprudent as holding whale industry stocks was after kerosene replaced whale oil for lighting…The risks of remaining invested in FF-Dependent Companies, including coal, oil and gas companies and other industry sectors especially impacted by the energy transition…are today large and growing larger swiftly.”
The fund has over $1.1 billion invested in more than 25 companies with significant coal assets. Based on its investments in these companies, the fund owns and is responsible for the carbon footprint of 17.2 million tons of coal reserves, the equivalent annual CO2 emissions from 6.6 million cars, greater than the emissions from the state of Connecticut.
The panel’s report comes as ahead of the April 30th legislative hearing on the Fossil Fuel Divestment Act. co-chaired by Senators Liz Krueger and Assemblyman Felix Ortiz
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Contact: Lindsay Meiman, [email protected], +1 (347) 460-9082