State pension fund commits $2.4 billion more for sustainable investments

ALBANY, N.Y. — The New York State Common Retirement Fund (Fund) has committed an additional $2.4 billion to three funds as part of its Sustainable Investments and Climate Solutions (SICS) program. To date, the Fund has deployed more than $26.5 billion toward its goal of $40 billion, to specific investment opportunities in the SICS program, New York State Comptroller Thomas DiNapoli, trustee of the Fund, announced April 21. The Fund has made commitments to the SICS program across asset classes including public equity, fixed income, private equity, credit, real assets, and real estate. “Climate change poses a real threat to our investments, but the actions announced today will help position the Fund to address those risks and seize on opportunities generated as the world transitions to a low-carbon economy,” DiNapoli contended. “The Fund is a leader on addressing the investment challenges posed by climate change and our efforts continue. Over one million members and beneficiaries depend on the Fund’s long-term strength for a secure pension. These latest investments continue our commitment to prudently reduce risks to our portfolio and protect the Fund.” The announced investments include $2 billion to the FTSE Russell TPI 1000 Climate Transition Index, an index fund that examines companies’ fossil-fuel reserves, carbon emissions, green revenues, management quality, and carbon performance. The index is designed to reflect the performance of global and diversified indices, weighted to account for the risks and opportunities related to climate change. This is in addition to the $2 billion the Fund committed to this strategy in 2021, DiNapoli’s office noted. The investments also include $250 million to the Oaktree Power Opportunities Fund VII, a fund targeting investments supporting infrastructure, including electric power, solar, and water systems though investments in aging infrastructure, energy efficiency, and renewable energy, primarily in North America. The third investment was $150 million to the Vision Ridge Partners Sustainable Asset Fund IV. It’s a fund targeting investments focusing on climate mitigation and adaptation through identifying, developing, and transforming assets across energy, transportation, and agriculture, primarily in North America.

Annual review complete

DiNapoli also announced that the Fund has completed its annual review of thermal coal, oil sands, shale oil and gas, and integrated oil companies, which is a part of its broader review of the transition readiness of energy-sector investments that face “significant climate risk.” The Fund will continue to restrict its investments in 39 coal, oil sands, and shale oil and gas companies and has newly restricted investment in eight coal and shale oil and gas companies that the Fund has determined are not prepared for the transition to a low-carbon economy. They include Kinetic Development Group Ltd., NLC India Ltd., PT Petrindo Jaya Kreasi Tbk., Yancoal Australia Ltd., Civitas Resources Inc., Peyto Exploration & Development Corp., Texas Pacific Land Corp., and Viper Energy Inc. Eleven coal and shale oil and gas companies were removed from the restricted list, DiNapoli’s office noted. The Fund will not directly purchase or directly hold debt or equity securities, or invest through an actively managed account or vehicle, in these restricted companies. The newly restricted securities, valued around $31.1 million, will be sold by the Fund. In 2019, DiNapoli released a Climate Action Plan, which contains a multifaceted strategy that included a goal of committing $20 billion to sustainable investments. In 2024, after reaching the initial commitment target, DiNapoli set a new goal of deploying $40 billion to sustainable investments and climate solutions by 2035.