Today’s 2018 Investors Summit on Climate Risk will see the $201.3 billion New York State Common Retirement Fund‘s (NYS Common) announce its intent to increase the fund’s investment in a low-emissions equities index by $2 billion to reach $4 billion.
The move will be made public at the Summit in New York by state Comptroller Thomas DiNapoli, who oversees the fund’s investments. Designed by Goldman Sachs Asset Management, the low-carbon index shies away from exposure to fossil fuel and other pollutant companies while gravitating toward tech stocks and environmentally friendly companies.
“We’ve successfully shifted significant holdings to lower carbon companies without losing value,” DiNapoli said in a statement obtained by CIO. “Our state pension fund is at the forefront of the worldwide effort to build a lower carbon economy. Our investment decisions and our shareholder engagements are a caution to corporations: if they’re not helping build a decarbonized future, they may get left behind. Our strategy for sustainable, lower carbon investing is working and will continue to expand.”
“Managing climate risk is key to protecting positive long-term investment returns,” Vicki Fuller, the Fund’s CIO said. “The success of our low emissions index ensures its ability to expand further in the years to come and demonstrates to other institutional investors that we can decarbonize our portfolios prudently and without risking value.”
According to the Wall Street Journal, the index has returned an estimated 19.93% from its January 2016 inception to January 26 of this year.
The proclamation comes days after the San Francisco Employees’ Retirement System’s board approved plans to create a “carbon constrained” passive index strategy to eliminate such companies from a section of its equities portfolio.
Across its portfolio, NYS Common has committed $7 billion to sustainable investing strategies. Most recently, Gov. Andrew Cuomo had announced a proposal that the fund end its future investments in fossil fuel companies, which is in-line with the Wednesday announcement.
DiNapoli’s office was unable to provide additional comment for CIO.