The New York State Common Retirement Fund will sell more than $235 million in stock and debt held in nearly two dozen shale oil and gas companies for failure to show they are preparing to move to a low-carbon economy, the Office of the New York State Comptroller announced recently.
The decision to divest $238 million from 21 fossil-fuel companies was announced Feb. 9. The announcement states the restrictions are part of New York Comptroller Thomas DiNapoli's Climate Action Plan, which looks at investment risks associated with climate change. DiNapoli, who oversees retirement assets, has stated his intention to transition the Common Retirement Fund’s (CRF) investment portfolio to net-zero greenhouse-gas emissions by 2040, according to the announcement.
“The shale oil and gas industry faces numerous obstacles going forward that pose risks to its financial performance," DiNapoli said in the statement. "To protect the state pension fund, we are restricting investments in companies that we believe are unprepared to adapt to a low-carbon future.”
The comptroller's office initiated a review of the 42 oil and gas producers in its portfolio last summer, according to reporting by Reuters. The review found the companies being divested "continue to invest heavily in high-risk and high-cost assets," a spokesman for DiNapoli's office told Reuters. Reuters also reported the CRT will continue to invest in 21 other shale companies.
The review was conducted after global investments and financial firm BlackRock announced it was pulling back from investments in fossil-fuel producers and encouraging energy executives to prepare for a lower-emissions world, according to Reuters.
The CRF has $9.8 billion invested with BlackRock, ranking it third in the top 10 states with pension funds invested in BlackRock, according to the Daily Signal.
BlackRock, while encouraging clean-energy investments to its clients, continues to invest in China. China has the highest share (29.8%) of C02 emissions of any country in the world, according to Worldometer.
Consumers' Research, a consumer-advocacy group, sent a letter recently to the governors of the 10 states most heavily invested with BlackRock. The "Consumer Warning" letter focused on BlackRock's investment ties to China, claiming the investments risk American security and the billions of U.S. dollars BlackRock has invested in the communist country with a history of human rights abuses.
"BlackRock’s unabashed gusto for Chinese markets flies in the face of concerns about China’s ascendant standing in the world, its authoritarian model of government, and its ambitions to supplant the U.S. as the pre-eminent world power," the organization stated in the letter.
New York's drawback from oil and gas stocks comes at a time when those stocks lead market gains, according to Empire State Today. The gains are attributed to higher commodity prices and reduces spending, the business news agency reported Feb. 11.
Hess and APA Corp., two of the energy companies being divested from, are among the top 10 performers in the S&P 500 index so far this year. All 10 of said top performers are oil and gas companies, Empire State Today reports.