New York’s mammoth pension fund will divest from fossil fuels, the state’s comptroller announced Wednesday, sending a shockwave through the climate movement and energizing the effort to dump investments that contribute to climate change.
Climate advocacy groups praised the fund as the largest in the world to take such a step. Comptroller Thomas DiNapoli said in a press release that the $226 billion retirement fund will aim to transition to a net-zero-emissions portfolio by 2040.
Within five years, DiNapoli said, the fund would complete a review of its energy sector investments, assessing “their future ability to provide investment returns in light of the global consensus on climate change” and potentially divesting from the “riskiest companies.”
“Those that fail to meet our minimum standards may be removed from our portfolio,” he said. “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.”
New York has faced years of pressure from activists to divest from fossil fuels. And it had already divested from 22 coal companies earlier this year. But the portfolio-wide review marks a huge shift away from carbon-emitting investments. It also marks a shift for DiNapoli, who’s opposed divestment in the past.
The move could pressure other funds, such as California’s gargantuan pension fund, to follow suit.
“This historic action will help send market signals that fossil fuels have had their day, and clean energy is the future for New York,” said Rich Schrader, New York Policy Director at the Natural Resources Defense Council.
DiNapoli’s press release noted that the state fund’s plans are more ambitious than those laid out in the Fossil Fuel Divestment Act, legislation backed by activists and Democrats in the state that would require the comptroller to divest the pension fund from fossil fuel investments. As a result, the bill’s sponsors indicated that it will not reintroduce it in 2021, the release noted.
DiNapoli’s commitment goes “over and above” the legislation, Richard Brooks, an organizer with 350.org, told Earther.
“We’ll look back on this as a big moment in the story of the fossil fuel divestment movement,” Brooks said.