February 29, 2016

New York State Pension Fund Lost $5.3 Billion From Fossil Fuel Holdings


February 29, 2016

Contact: Lindsay Meiman, (347) 460-9082

Albany, NY — The New York State Common Retirement Fund (NYS-CRF) lost at least $5.3 billion 1 from their investments in the top 200 coal, oil, and gas companies, according to a new report from Corporate Knights. New York State’s $189.4 billion pension fund is the third largest in the nation, just following California’s CalPERS and CalSTRS, which are now required by law to divest from thermal coal.

This groundbreaking report comes as politicians, environmentalists and financial experts gather in Albany for a forum on the Fossil Fuel Divestment Act co-sponsored by New York State Senator Liz Krueger  and Assembly Assistant Speaker Felix W. Ortiz. This is the first statewide climate legislation that calls for full divestment from coal, oil and gas.

“The era of fossil fuels is coming to an end, and this report demonstrates very clearly why divestment is not only environmentally sound, but financially responsible,” said New York State Senator Liz Krueger, co-sponsor of the Fossil Fuel Divestment Act. “By staying invested in fossil fuels over the last three years our state pension fund missed out on over $5 billion in potential returns. Investment in fossil fuels is a sinking ship, and it’s high time we headed for the lifeboats.”

This report comes as New York Attorney General Eric Schneiderman continues his investigation of Exxon to determine whether the company lied to the public about the risks of climate change or to investors about how such risks might hurt the oil business. Despite this ongoing investigation, the state’s retirement system continues to invest directly around a billion dollars in Exxon Mobil.

“New York is a rich state, but perhaps not so rich it can afford to waste billions investing in failing business models–especially when the warming caused by those companies will cost a fortune to deal with!,” said Bill McKibben, Co-Founder of 350.org. “New York has made bold moves for climate such as banning fracking and phasing out coal-fired power plants, yet the pension fund continues to invest in both of these destructive and outdated extraction practices.”

This massive loss of $5.3 billion is the equivalent to putting over $4500 back in the pockets of each of the 1.1 million members statewide, and could have covered nearly 12 percent of the state costs from devastating climate change-fueled Hurricane Sandy in 2012.

“Our analysis with the Decarbonizer suggests the New York State Common Retirement Fund’s equity portfolio would have been at least $5.3 billion better off had it divested from the biggest oil, gas and coal companies three years ago in favour of companies providing climate solutions,” said Toby Heaps, CEO of Corporate Knights, an investment research company. “This number is a conservative estimate based on the equities side of the fund. The energy transition away from old fossil fuel energy to new clean energy is underway and investors who cling to fossil fuel holdings risk substantial value destruction over the long-term.”


1 The analysis used the top 100 domestic and international equity holdings of the New York State Common Retirement Fund,Asset Listing as of March 31, 2012 as a proxy for its overall domestic and international equity holdings exposure. The value of these top 100 holdings  at the time was $29,871,401,702 or 45.6% of the $65,593,702,199 value of the Fund’s total domestic and international equity holdings. Using the top 100 as a proxy for the domestic and international equity holdings, and removing CU 200 + dirty over thirty coal miners and utilities from top 100 then reinvesting in “green” companies already held by the fund according to their float market capitalization (rebalancing quarterly over the past 3 years), the Fund would have made the fund an extra $5.3 billion. The analysis estimated the potential financial impact had the Fund shifted its investments from the most carbon heavy coal and oil companies (The Carbon Underground 200, originally pioneered by Carbon Tracker,  was provided by Fossil Free Indexes, and consists of the top 100 public coal companies globally and the top 100 public oil and gas companies globally, ranked by the potential carbon emissions content of their reported reserves) and the most coal-intensive utilities (utilities which generate more than 30 percent of electricity from coal was provided by South Pole Group) to companies that derive at least 20% of their revenues from environmental markets or new energy (Companies providing environmental solutions derive at least 20% of their revenues from environmental markets or new energy as verified by FTSE Environmental Markets or Bloomberg New Energy Finance). From there, the total returns over a three year period starting on October 1, 2012 were calculated . This coincides with the first full quarter following 350.org founder Bill McKibben’s article in Rolling Stone, which launched the fossil fuel divestment movement. This analysis is based on a snapshot in time (March 31, 2012 top 100 holdings free float market cap weighted) and the fund continues to invest in all the carbon heavy stocks listed above as of its most recent 2015 disclosures. http://decarbonizer.co/pdfs/Decarbonizer%20Methodology.pdf