Governor Andrew M. Cuomo recently unveiled the 9th proposal of the 2018 State of the State: a plan for divesting the New York State Common Retirement Fund from significant fossil fuel investments. Specifically, this proposal calls for the following:
- Ceasing all new investments in entities with significant fossil fuel-related activities; and
- Governor Cuomo and Comptroller DiNapoli will work together to create an advisory committee of financial, economic, scientific, business and workforce representatives as a resource for the Common Retirement Fund to develop a de-carbonization roadmap to invest in opportunities to combat climate change and support the clean tech economy while assessing financial risks and protecting the Fund.
This proposed approach helps to address the complexity of the Common Fund’s portfolio while providing a clear roadmap for de-carbonization. Adopting this approach will send a strong message to the financial markets that major investors, including New York State, are fully and aggressively committed to a carbon-free, clean energy future.
Finally, the Governor calls on the Fund to dedicate a meaningful portion of the Fund’s portfolio to investments that directly promote clean energy — which makes economic and environmental sense.
“New York has made incredible strides in securing a clean energy future for this state with our nation-leading clean energy standard, off shore wind development, and aggressive investment in the clean tech economy, yet the Common Fund remains heavily invested in the energy economy of the past. Moving the Common Fund away from fossil fuel investments will protect the retirement savings of New Yorkers,” Governor Cuomo said.
The New York Common Fund manages approximately $200 billion in retirement assets for more than one million New Yorkers across the state. While the Fund is intended to provide long-term financial security for its members, it remains heavily invested in fossil fuels.
“This proposal lays out a roadmap for New York’s $200 billion Common Fund to take responsible steps to divest from its fossil fuel holdings, leading to a more secure retirement fund for countless New Yorkers while also helping to achieve the state’s clean energy goals.”
In 2017, the Common Fund listed holdings in more than 50 oil and gas companies that have been identified as among the 100 most carbon-intensive in the world, a figure that has increased since 2016. With billions of public employee dollars invested in the fossil fuel industry, and nearly $1 billion invested in ExxonMobil alone, the Common Fund holds increasingly risky financial investments for New Yorkers, particularly as both New York State and the world back away from the use of fossil fuel as a primary energy source.
For example, just a couple of weeks ago, the World Bank announced that it will end financial support for oil and gas exploration within the next two years, an announcement that itself comes on the heels of recent action by the Norwegian sovereign wealth fund, the largest fund in the world, to move away from fossil fuel investments.
The Common Fund and Comptroller DiNapoli have been outspoken about the importance of incorporating environmental, social, and governance (ESG) considerations into the Fund’s investment strategy. New York State has already taken major steps to reduce its carbon footprint and cut back on the use of fossil fuels as an energy source.
Governor Cuomo’s climate strategy is leading to a cleaner, more resilient and affordable energy system for all New Yorkers by stimulating investment in clean technologies like solar, wind, and energy storage and further requiring that 50% of the state’s electricity needs come from renewable energy sources by 2030. Already, this strategy has driven nearly 800% growth in the statewide solar market, improved energy affordability for 1.65 million low-income customers, and created thousands of jobs in manufacturing, engineering, and other clean tech sectors.
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