The New York State Common Retirement Fund reached agreements with all seven portfolio companies where it filed climate-related shareholder proposals during the 2021 proxy season, State Comptroller Thomas P. DiNapoli, trustee of the Fund, announced today. This was the first proxy season the Fund achieved agreements on all of its climate-related shareholder proposals.
“A low-carbon economy is becoming a reality with more and more companies recognizing the need to adapt their businesses and address the financial risks posed by climate change,” DiNapoli said. “I commend the companies that have accepted our proposals. Our work is not done, however, and we will continue engaging with portfolio companies to encourage climate risk management, strategic planning and reporting.”
Four of the companies agreed to adopt the standards of the Science Based Targets initiative (SBTi), which are considered a best practice in reducing greenhouse gas (GHG) emissions. They are Domino's Pizza Inc., medical supply company McKesson Corp., commercial real estate company Realty Income Corp. and Advance Auto Parts Inc. Among these four, McKesson agreed to set the SBTs in line with a 1.5-degree scenario outlined in the Paris Agreement.
Steel maker Cleveland-Cliffs Inc. notably set GHG targets and committed to co-funding an environmentally friendly hydrogen project. Chemical maker Albemarle Corp. committed to adopting GHG targets and water treatment company Pentair Plc agreed to set GHG and clean energy targets.
While the Fund saw adoption of its climate proposals, DiNapoli announced the Fund voted against a record number of director nominees at companies that have failed to address climate risks. In total, the Fund voted against 387 individual directors at 72 companies, including Chevron Corp., ExxonMobil Corp., Berkshire Hathaway Inc. and Caterpillar Inc. In 2020, the Fund enhanced its Proxy Voting Guidelines by adding criteria clarifying how the Fund reviews companies’ preparedness for the transition to a low-carbon economy, and delineating situations in which the Fund will generally vote against director nominees for failing to manage climate risks.
Notably, the Fund voted for a slate of candidates put forward by activist investment firm Engine No. 1, who won seats on ExxonMobil’s Board of Directors with the goal of to better position the energy company for the low-carbon future.
Since taking office in 2007, DiNapoli has been recognized as a global leader for his efforts to protect the Fund’s investments, address material risks from climate change and pursue sustainable investment opportunities for the Fund. In 2019, DiNapoli released a Climate Action Plan, a multi-faceted strategy that includes a goal of committing $20 billion to sustainable investments, dedicating staff to pursue climate solution investments, and establishing minimum standards for portfolio companies that will inform engagements, investments and potential divestment decisions. Building on the Climate Action Plan’s solid foundation, in December 2020, DiNapoli announced the Fund has adopted a goal to transition its portfolio to net zero greenhouse gas emissions by 2040. DiNapoli recently released an update on the action plan’s progress.
Since 2007, the Fund has filed more than 150 climate change-related shareholder resolutions and reached 75 agreements with portfolio companies to analyze climate risks, set GHG reduction targets and renewable energy and energy efficiency goals, prevent deforestation, publish sustainability reports and appoint directors with environmental expertise.
About the New York State Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension fund in the United States with assets of approximately $254.8 billion as of March 31, 2021. 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. The Fund has consistently been ranked as one of the best managed and best funded plans in the nation.