Hold on tight, 2018 is a divestment rollercoaster. The year kicked off with two big announcements from the fossil fuel divestment movement. New York Governor Andrew Cuomo set the tone, mid-December 2017, by calling on the state employee retirement system to divest. “Moving the Common Fund away from fossil-fuel investments will protect the retirement savings of New Yorkers,” Cuomo said in a statement. Less than a month later, New York City Mayor Bill de Blasio announced the $190 billion city pension systems, some of the largest in the country, will divest from fossil fuels. New York City’s announcement landed with a boom, in part, due to the participation of the City Comptroller and pension board representatives. The Empire State building turned green that night in celebration
New York State, however, hit immediate opposition from the State Comptroller, Tom DiNapoli.
DiNapoli is far from a climate denier. In fact, he wears his climate accolades proudly. However, when it comes to the pension portfolio, he prefers to “keep a seat at the table” of the world’s fossil fuel companies. In fact, DiNapoli is a self-styled champion of the shareholder engagement crowd, especially in the wake of a resolution filed with Exxon last year demanding the company produce a report on climate-related risks to its business. The resolution won a landmark 62% of shareholder votes, and DiNapoli touted the win as if Exxon had agreed to become a solar company. “Exxon’s decision demonstrates that investors have the power to hold corporations accountable and to compel them to address our very real climate-related concerns,” published DiNapoli on NYS’s government website.
In very predictable fashion, after much delay, and only after shareholder’s threatened to file another resolution, Exxon then published a report telling shareholders it envisions an energy future where 90% of Exxon’s 2016 proven reserves will be developed by 2040 (pg. 10). And don’t fret too much about stranding the remaining 10% of reserves. Maybe new technologies will allow Exxon to extract those, too. Exxon proclaimed that even the global commitment to keep the world below 2/1.5C codified in the Paris Climate Agreement will have limited impact on their bottomline. Despite pronouncement in support of the agreement, Exxon has revealed their true plan is to keep on drilling, amass profits, world be damned.
We find ourselves another year down the road of business as usual. Exxon has announced a large scale investment program for new drilling in the United States; Exxon is number one in political spending to block climate action; all while the physical tolls of the climate crisis are intensifying.
This seems like a fine time to lift the lid on the holdings of the third largest pension system in the US. Before we do, New York should be commended for supplying a comprehensive list of fund holdings. Not every public fund is as transparent, and we appreciate the openness. The latest available list of holdings from the New York State Common Retirement Fund (NYSCRF) is from March 31, 2017.
Here’s what we see.
|Fossil Fuel Sector||Dollar value held within the portfolio||Number of holdings||Number of holdings subjected to shareholder resolutions*||% of portfolio|
* As per the Ceres Shareholder Resolution database. This includes non-climate related resolutions. Database can be found here: https://engagements.ceres.org/
** Holdings that are not designated within the Energy Sector or do not consider fossil fuel production or support their core business, but have significant involvement in fossil fuels. Examples include Berkshire Hathaway and General Electric.
The fund holds, over a billion dollars in Exxon stock and bonds — $1,121,931,762 to be precise (part of Group 1 in table above).
If we go beyond the top 200 fossil fuel reserve holders, a list used by many divestment campaigns, and look for all companies involved in the production, distribution, transportation, services, storage, or support industries of fossil fuels, NYSCRF holds more than $13.1 billion or 6.6% of the total portfolio in such assets. If one considers this number inflated for including a handful of diversified companies with big fossil fuel operations, including General Electric, know that this estimate does not include NYSCRF’s single largest holding…$10+ billion in the BlackRock ACWI Ex-US Superfund. This investment alone almost certainly holds hundreds of millions of dollars in additional fossil fuel investments.
In 2014 New Yorkers celebrated the state ban on fracking. We first looked at NYSCRF’s holdings more than 2 years ago (March 31, 2015 holdings) and made a special effort to uncover fracking investments. 68 fracking holdings we identified at that time are still held by the fund and worth more than $4.3 billion, and other fracking-related holdings have been added. The fund even includes niche fracking-related holdings like a $7 million equity investment in Fairmount Santrol, a leading frac sand supplier.
New York employees also have their pensions invested in at least 31 coal and coal relatedcompanies. This includes the remnants of NYSCRF’s Arch Coal holdings, one of many coal companies that filed for bankruptcy and left shareholders,workers, and communities to bear the costs of its irresponsible behavior.
Lastly, we flagged 17 holdings that clearly identify as solar, wind, geothermal, cleantech or fuel cell investments. This group represents just under $150 million in investments. NY State Comptroller DiNapoli does like to promote the fund’s investments in “low-carbon companies.” However, by any measure NYSCRFs holdings reflect yesterday’s fossil fuel economy more than tomorrow’s alternative energy solutions.
We get the world we invest in. If billions of dollars in public money is backing hundreds of fossil fuel extraction companies how can we expect to make a prudent, equitable and rapid transition? Over a billion dollars invested in a company ranked “worst” among lists of companies lobbying against climate policy?
As New Yorkers across the state are seeing the impacts of climate change, it’s time for Tom DiNapoli to take a broader view of the social impact of the fund. What good is a pension check for retirees if there is no place for them to retire? Please check out DivestNY and join the movement.
Source link for NYSCRF Holdings as of March 31, 2017 (http://www.osc.state.ny.us/retire/word_and_pdf_documents/publications/cafr/asset_listings_17.pdf)