New York State pension plan looks at divesting from coal mining companies in its portfolio
Energize Weekly, February 5, 2020
The New York State Common Retirement Fund – the third largest public pension plan in the country – said it may divest from any of the 27 thermal coal companies in its portfolio which it deems are not taking steps to “transition to a sustainable business model.”
“Investors who fail to face the risks and seize the opportunities presented by climate change put their portfolios in jeopardy,” New York State Comptroller Thomas DiNapoli said in a statement. “We are assessing minimum standards for transition readiness at coal mining companies first, because they face the greatest risk as the world turns to cleaner and renewable energies. If a particular company is not ready to move away from its reliance on thermal coal mining for profits, we may divest our holdings in that company.”
The review is part of a Climate Action plan DiNapoli has put in place to “decarbonize” the state’s pension investments.
The New York pension fund with $210 billion in assets is behind only the pension plans for California public employees and California teachers.
The companies selected for review each earn 10 percent or more of their revenues from mining thermal coal, which is burned to create electricity or power industrial processes.
In letters to each company DiNapoli asked for information on how the company plans to achieve the state’s minimum standards, such as aligning its business with the Paris Climate Agreement’s greenhouse gas reduction targets, reducing capital expenditures on coal, setting long-term greenhouse gas reduction goals and increasing revenue from low-carbon or green technologies.
The companies have until mid-February to respond. “Companies that fail the Fund’s assessment and cannot demonstrate transition readiness may be subject to divestment pending fiduciary review to ensure their removal will not negatively impact the Fund,” the pension plan said.
Among the companies receiving letters were: Arch Coal, Anglo American Plc, Peabody Energy Corp., China Coal Energy Company, Yanzhou Coal Mining Company Ltd., Consol Energy, Coal India Ltd., and Inner Mongolia Yitai Coal Co. Ltd.