The $2 billion boost was announced at the Investors Summit on Climate Risk, where top fund managers discussed finance for a low-carbon, clean energy future.
By Nicholas Kusnetz | Feb 1, 2018 | Inside Climate News
America's third-largest public pension fund is ramping up its climate-savvy investments, New York State Comptroller Thomas P. DiNapoli announced to global finance leaders on Wednesday.
The fund, a huge and influential investor, plans to double its stake to $4 billion in a portfolio of companies that disclose and seek to lower their emissions of global warming pollution.
"We've particularly been concerned about how we can address the issue of climate risk and benefit our portfolio," DiNapoli said, speaking at the Investor Summit on Climate Risk, where money managers called for investors to face up to the risks of climate change and to accelerate action to fight global warming.
As the summit was underway at the United Nations on Wednesday, the UK Government's Met Office published an ominous new five-year forecast that adds urgency to the investors' climate concerns: Annual global temperatures could reach 1.5 degrees Celsius above pre-industrial levels within the next five years, the Met Office warned. The aim of the Paris climate agreement is to prevent warming from getting much beyond that level.
The $2 billion in additional investment DiNapoli announced will go into a low-emissions index fund that New York's Common Retirement Fund created in 2016. While the low-emissions index fund—which has had an annualized investment return of 16.5 percent—represents just a fraction of the pension fund's more than $200 billion in assets, DiNapoli said he hopes to continue to grow the low-carbon portfolio.
The special climate fund is based on a traditional index fund made up of leading corporations, except that it weights its investments by considering whether the companies disclose their carbon footprints and act to reduce them.
Shareholders Push for Risk Disclosure
DiNapoli is one of several powerful officials from the city and state of New York who have sought to pressure fossil fuel companies and influence their investment and risk management practices. The city has launched litigation seeking to recover climate damages and pledged to divest its pensions funds from fossil fuel producers, and the state's attorney general has been in a long fight with ExxonMobil on its climate record.
Corporations have come under increasing pressure in recent years to better disclose the risks they face in a future of rising temperatures and greater restrictions on greenhouse gas emissions. DiNapoli's office helped lead a resolution approved last year by Exxon shareholders that requires the oil giant to report on those risks annually.
