The public employees’ pension fund in New York State is selling off US$238 million in stock and debt in 21 oil and gas fracking companies, while holding onto its investments in 21 other shale sector fossils.
“As market forces and new policies drive the energy transition, we must align our investments with a profitable and dynamic future,” State Comptroller Thomas DiNapoli said in a release. “The shale oil and gas industry faces numerous obstacles going forward that pose risks to its financial performance. To protect the state pension fund, we are restricting investments in companies that we believe are unprepared to adapt to a low-carbon future.”
The release lists the 21 companies the pension fund is divesting.
“The $280-billion New York State fund is not a major holder of shale companies, but as the third-largest U.S. state pension fund its decisions are closely followed as other institutions weigh whether to move away from fossil fuel stocks,” Reuters reports. “Last year, DiNapoli said the fund would sell $7 million worth of securities in Canadian oil sands companies and start its shale companies review. Next it will review whether to take similar steps for big integrated oil companies.”
The #DivestNY campaign took a victory lap on the latest news. “The shale oil and gas sector is teetering,” the group said in a release. “The NYS Comptroller has sent a clear signal that he doesn’t have confidence that this sector is able and ready to transition to a renewables future. This shows how financially risky this sector is,” pointing to the need for the New York pension system to drop all its shale assets.
“As New York State’s largest-ever divestment, this move sends a clear message to other financial institutions around the world,” said Stand.earth Climate Finance Director Richard Brooks. “Fossil fuels—especially fracked gas—are a bad bet for our economy, our communities, and our climate.”
Still, Simiso Nzima, managing director of global equity at the mammoth California Public Employees’ Retirement System (CalPERS), told Reuters the mammoth fund isn’t ready to divest. “When you divest you don’t solve climate change, you don’t solve the issues,” he said.
CalPERS’ strategy will be to vote against directors in the companies in which it holds shares, based on environmental and boardroom diversity issues.