The retirement contributions of New York state workers will no longer be invested in fossil fuels. The state announced Wednesday that it is removing oil and gas stocks from its portfolio, making it the world’s largest pension fund to divest from the fossil fuel industry.
The pension fund’s financial portfolio is worth $226 billion, and it disburses $1 billion to retirees every year. The new plan is to sell off the riskiest gas and oil stocks and be completely divested from fossil fuels by 2025. By 2040, the fund plans to completely axe carbon polluters.
“We continue to assess energy sector companies in our portfolio for their future ability to provide investment returns in light of the global consensus on climate change,” said state Comptroller Thomas DiNapoli in a statement. “Those that fail to meet our minimum standards may be removed from our portfolio. Divestment is a last resort, but it is an investment tool we can apply to companies that consistently put our investment’s long-term value at risk.”
First to go? Companies that produce ultra-dirty tar sands oil. Tar sands are a sticky mixture of sand, clay, water and bitumen that require an especially environmentally harmful process to extract. Saudi Arabia, Venezuela and Canada have the world’s largest reserves of tar sands. So Imperial Oil, Exxon Mobil Corp’s Canadian branch, is first on the chopping block. Then, the fund will review and probably eliminate frackers, such as Royal Dutch Shell and Exxon Mobil. Oilfield service companies, storage and pipeline builders are other top candidates. After that, fund managers will consider utility companies.
Environmental activists have been pushing for divestment in fossil fuel companies for years. Ireland’s national government divested in 2018 and Norway’s in 2019. Oslo and New York City are planning to divest at the city government level. More than 1,200 universities, religious organizations, philanthropic foundations and other groups have also pledged to sell off their fossil fuel holdings.
Via Huffington Post
Image via Artem Sapegin