New York State Comptroller Thomas P. DiNapoli today released a Climate Action Plan to protect and invest the assets of the $210 billion New York State Common Retirement Fund (Fund). The plan lays out a path for the Fund to further address climate risk in its portfolio. Subject to fiduciary analysis, the Fund may divest from companies that fail to meet minimum standards. As a first step standards will be developed for thermal coal, followed by other major industries or sectors that present climate risk to the Fund.
DiNapoli’s Climate Action Plan follows his April 16 release of a report from the Decarbonization Advisory Panel, which he created with Gov. Cuomo. The Plan incorporates many of the Panel’s recommendations for managing the Fund’s exposure to climate risks.
“Climate change is one of the most significant risks facing investors and the warnings are growing increasingly dire,” DiNapoli said. “The Fund has taken many steps to assess and address climate risk already, but clearly more must be done and done quickly. This is a proactive plan to mitigate climate risk, capitalize on opportunities in the growing low carbon economy and protect the fund’s long term value. The plan builds on the important work of the Decarbonization Advisory Panel.”
DiNapoli will double, from $10 billion to $20 billion over the next decade, the Fund’s commitment to its Sustainable Investment–Climate Solutions Program. The Fund will also hire dedicated staff to identify sustainable investment opportunities including climate solutions.
The climate action plan will also:
- Continue engagement with portfolio companies to encourage and support climate risk management, strategic planning and reporting;
- Refine external manager evaluation to better assess the climate-related strategies of the Fund’s managers; and
- Encourage index providers to integrate climate risks and opportunities into their index construction.
“It will become self-evident in the coming years that the actions taken by the New York State Common Retirement Fund will show up in its leading investment performance,” said Joy-Thérese Williams, Chair of the Decarbonization Advisory Panel, and Senior Advisor at Mantle314. “Other pension funds and investment managers would be well served to use the Fund’s Climate Action Plan as a blueprint for their inevitable move to climate resiliency.”
"We applaud New York State Common Retirement Fund's new climate action plan as it will be a leading initiative among the nation's largest public pension funds," said Mindy Lubber, Ceres CEO and President. "It reflects Comptroller DiNapoli's commitment to address the long term risks of climate change and focus on the investment opportunities of our carbon constrained future. We especially applaud the commitment to building staff and investment manager expertise to assess sectors that face high risks from climate change and to create minimum standards to evaluate investments in those sectors."
Since taking office in 2007, DiNapoli has been recognized as a global leader in addressing climate change-related investment risks and pursuing opportunities for the Fund’s investments. For two consecutive years, the Asset Owners Disclosure Project ranked the Fund as the top U.S. pension fund, and third globally, for its efforts to assess and combat climate-related investment risk. DiNapoli’s Climate Action Plan is key to the Fund’s efforts to reduce its exposure to climate risk and to capitalize on opportunities.
The full plan can be found here: https://osc.state.ny.us/pension/climate-action-plan-2019.pdf.
About the NYS Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension fund in the United States with estimated assets of $210.2 billion as of the March 31, 2019 end of its most recent fiscal year. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.