The New York State Common Retirement Fund (CRF) announced it will launch a thorough review of its coal investments to ensure they’re realigning their business models to be more sustainable and supporting the development of tomorrow’s low-carbon economy.
“We are assessing minimum standard for transition readiness at coal mining companies first, because they face the greatest risk as the world turns to cleaner and renewable energies,” New York State Comptroller Thomas P. DiNapoli said in a statement. Any laggards would face risk of divestment from the fund.
The announcement is a step in the CRF’s overall plan to decarbonize its portfolio, after a six-member advisory group warned the fund last year to have 100% sustainable investments by 2030.
The fund has been taking major steps lately to fully realize these low-carbon aspirations. After DiNapoli announced intentions to spearhead a doubling of the pension plan’s environmental, social, and governance (ESG) funding to $20 billion, the pension appointed its first ESG director to help advance the green agenda.
The CRF sent a survey due in mid-February asking the coal companies in question to align their business models with standards set by the Paris Agreement. Among the concerns being evaluated are a reduction in capital expenditures on coal, setting long-term targets to reduce greenhouse gas emissions, improving climate reporting, and increasing revenue from low-carbon or green technologies.
“This is an important step in the right direction as this new standard will help New York State Common Retirement Fund reduce its climate-related risks associated with fossil fuel companies and implement its climate action plan,” said Ceres CEO and President Mindy Lubber. “It will also ensure that the Fund invests in transition-ready companies, and not in companies whose future is tied to thermal coal mining, which has a dim future in light of the accelerating transition to a sustainable, net-zero emissions economy.”
CRF is a member of the Ceres Investor Network on Climate Risk and Sustainability.
The fossil fuel divestment movement has been gaining traction, as many UK public universities committed to doing the same, as well as a UK pension scheme earlier this week.