NY's $260B Pension Fund Is Dropping Exxon, Other Energy Company Holdings
The New York State Common Retirement Fund plans to restrict its investments in Exxon Mobil Corp. and seven other oil and gas companies after reviewing their efforts to shift to a low-carbon economy.
The pension plan will sell stocks and bonds, worth roughly $26.8 million, in Exxon, Guanghui Energy Company Ltd., Echo Energy Plc, IOG Plc, Oil & Natural Gas Corp., Delek Group Ltd., Dana Gas Co. and Unit Corp., New York State Comptroller Thomas DiNapoli, who oversees the fund’s $260 billion, said in a statement.
The public retirement fund, one of the biggest in the US, said four years ago it would review all of its fossil-fuel holdings as it sought to reduce investment risks linked to climate change. Last year it curbed holdings in 50 companies involved in coal, shale oil and gas, and oil sands, including Pioneer Natural Resources Co. and Hess Corp.
The retirement fund said Thursday it plans to now focus on investments in utility companies and their efforts to shift away from fossil fuels. It also set a goal to invest $40 billion in sustainable and climate investments by 2035, after meeting an initial target of $20 billion. Those assets include energy storage, resource efficiency and green infrastructure.
Additionally, the fund said it will boost its investments in climate indexes by 50% to more than $10 billion in the next two years, with a goal to double that by 2035.
West Yorkshire Pension Fund looks to up climate investments
The West Yorkshire Pension Fund (WYPF) has announced plans to increase its investment in climate solutions to help meet its 2050 net-zero target, and review its level of equity holdings in the oil and gas sector.
The plans were announced alongside a broader package of developments, following a recent review of its strategic asset allocation and its investment beliefs.
In particular, the fund will be looking to help sustainable cities and communities, to support investment in sustainable transport, the building of affordable and energy efficient homes, as well as retro fitting existing housing stock and developing brown field sites.
In addition to this, the WYPF will look to review its level of equity holdings in the oil and gas sector, including an assessment of the impact of WYPF’s engagement with the sector.
Pending completion of this review, WYPF will not be increasing its holdings in listed fossil fuel stocks.
More broadly, the fund also made clear that it is not using WYPF assets to fund new fossil fuel developments, confirming that WYPF will not be lending to the oil, gas and coal sector and will continue to work with other like-minded investors to demand a similar approach from the banking industry.
Climate issues were not the only area of focus, as WYPF is also set to invest in UK’s economic growth driving decent work to support greater investment in innovation and infrastructure to address today’s challenges and creating better job opportunities for all.
Commenting on the changes, WYPF investment advisory panel chair, Andrew Thornton, said: “WYPF’s primary responsibility is to ensure that members’ pension promises are met at an affordable and sustainable cost to employers. Investment beliefs are a crucial part of setting the fund’s asset allocation to achieve this aim and also help shape the responsible investment policy.
“Whilst all of the UN Sustainable Development Goals have clear merit, we were able to build the most coherent investment thesis around the three themes that we have chosen, which complement our work with a range of local and national partners to help drive sustainable economic growth locally and deliver a positive real-world climate impact.
“WYPF is committed to achieving net-zero emissions for our investments by 2050 and we want to see real-world transition from the companies that it invests in.
“With regards to the fossil-fuel sector in particular, as responsible and engaged investors, we wish to make clear that WYPF does not support further development and that we expect to see tangible progress being made by these companies over the next 12 months.”
The new investment strategy, including the fund's revised investment beliefs, are set to be issued for consultation with stakeholders in February 2024.
Pension company warns Nordic firms ‘overlooking’ biodiversity
Large Nordic companies are overlooking biodiversity risks and opportunities, analysis by Danish pension company Danica Pension has found.
It warned that this lack of attention and understanding could affect whether these companies were attractive investments for pension investors.
Danica Pension’s analysis assessed Nordic companies on a scale from zero to four based on 19 criteria.
It found that Norwegian companies were at the forefront of accounting for biodiversity among the Nordic nations, with an average rating of 2.04.
Meanwhile, Danish companies came out worst in the analysis, with an average score of 1.6.
Swedish firms averaged a score of 1.8 and Finnish companies had an average rating of 1.76.
Of the 100 companies assessed, 84 saw biodiversity as a risk or business opportunity, but only 15 had an overview of how they depend on nature to conduct business or how they have a negative impact on it.
Three-quarters (75) of the companies surveyed said they had a desire to minimise their footprint on nature, but only 27 met the criteria to reach ‘level 3’, which meant that, for example, they had set concrete goals and plans to minimise the consumption of water or plastic, be deforestation-free, increase the proportion of circular materials or produce crops in a way that soil quality improves.
"Companies have challenges in working with aspects of nature and integrating risks and opportunities into their business models,” said Danica Pension and Danske Bank Asset Management head of climate and nature, Mads Steinmüller.
“It is not surprising that they are, by and large, not far within the nature agenda and have a potential for improvement, as it is a new and complex area where knowledge, solutions and tools are only being developed. But we generally find that companies want to raise their ambitions, which is also an unavoidable necessity.
"For example, companies in medicine, food, forestry, fishing or mining supply socially critical products to the economy. Therefore, it is necessary for companies that depend on nature to contribute to preserving and restoring it.
“It will help companies to future-proof their business, because if they don't, it could have consequences for society and our customers' pension investments.”
Steinmüller noted that, going forward, Danica Pension will use its analysis model in its active ownership of companies to assess their work in integrating nature into the business.
It uses principles from organisations such as the Taskforce on Nature-Related Financial Disclosures, Business for Nature, the Science-based Targets Initiative or the Transition Pathway Initiative, which Danica Pension said enabled it to evaluate the companies' biodiversity strategies on a scientific basis, set clear expectations for their handling of natural aspects, and monitor their progress over time.
"Ultimately, companies must document how their products and services depend on and affect nature throughout the value chain and make concrete goals and action plans for how and where they want to improve their footprint, and report on the development,” Steinmüller added.
“It should give us investors greater certainty about their impact, but also whether they can get hold of the natural resources they need for their products and can still be attractive investments.”
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