New York's pension fund will divest its $226 billion pension fund from fossil fuel producing companies by the end of the next decade, Comptroller Tom DiNapoli on Wednesday announced.
The move is meant to coincide with New York's broader transition away from carbon emitting fuel sources by the middle of the century.
Divestment from fosisl fuels will include a four year review of investments in companies that are in the energy sector. Standards will be reviewed for how ready a company is for transition to non-carbon producing fuels and climate-related investment risk.
“New York State’s pension fund is at the leading edge of investors addressing climate risk, because investing for the low-carbon future is essential to protect the fund’s long-term value,” DiNapoli said in a statement.
“Achieving net-zero carbon emissions by 2040 will put the Fund in a strong position for the future mapped out in the Paris Agreement. We continue to assess energy sector companies in our portfolio for their future ability to provide investment returns in light of the global consensus on climate change. Those that fail to meet our minimum standards may be removed from our portfolio. 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."
The move was praised by state lawmakers who have called for divestment. Sen. Liz Krueger, the top Democrat on the Senate Finance Committee, had pushed for divestment.
"The decision announced today by Comptroller Dinapoli to divest the New York State pension fund from fossil fuels and take comprehensive climate action is a tremendous step forward," said Sen. Andrew Gounardes of Brooklyn. 'New York continues to be a leader in combating climate change and setting ambitious goals towards a net-zero emissions future."