Regan Brown
New York City has been taking steps to address the climate crisis and reduce its reliance on fossil fuels. In January 2018, the city announced its goal to divest from fossil fuel reserve owners within five years, and it has since successfully divested an estimated $3 billion from pension funds, making it one of the largest fossil fuel divestments in the world. New York State has also joined the movement, with the New York State Common Retirement Fund deciding to divest from the riskiest fossil fuel companies and committing to decarbonize the fund by 2040. This commitment to addressing the risks and opportunities presented by a global transition to a low-carbon economy is a positive step towards a more sustainable future.
| Characteristics | Values |
|---|---|
| Location | New York City |
| Date of divestment | January 2018 |
| Value of divestment | $3 billion |
| Type of divestment | Fossil fuel reserve owners |
| Pension funds involved | NYCERS, BERS, TRS |
| Number of companies divested from | 7 |
| Type of companies divested from | Tar sands companies |
| Value of pension fund | Over $226 billion |
| Plan to decarbonize | Yes, by 2040 |
| Additional investments in climate solutions | $8 billion by 2025, $37 billion by 2035 |
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What You'll Learn
New York City pension funds divest from fossil fuels
New York City's pension funds have achieved a first-of-its-kind divestment from fossil fuel reserve owners, totalling an estimated $3 billion. The divestment was announced by Comptroller Scott M. Stringer and trustees of the New York City Employees' Retirement System (NYCERS) and the New York City Board of Education Retirement System (BERS). NYCERS divested approximately $1.8 billion, while BERS divested around $100 million. The New York City Teachers' Retirement System (TRS) is also in the process of divesting, with over $1 billion divested so far.
This move by New York City's pension funds addresses the significant financial and environmental risks posed by fossil fuel holdings. It is the result of a thorough fiduciary process to assess the portfolio's exposure to fossil fuel stranded asset risk, industry decline, and other financial risks stemming from climate change. The decision to divest is consistent with the trustees' fiduciary duty and marks a significant step towards a clean, green, and sustainable economy.
The campaign for divestment from fossil fuels in New York City's pension funds was a long and tireless effort. The Divest NY campaign, which began in 2012, played a crucial role in achieving this victory. Mayor Bill de Blasio's support for divestment, along with that of Cuomo, was instrumental in shifting the perspective of pension fund management. The financial argument for divestment, highlighting the potential for a quick nosedive in fossil fuel stocks, provided a strong basis for the moral and political claims.
In addition to New York City's pension funds, New York State's Common Retirement Fund has also taken steps towards divestment. State Comptroller Tom DiNapoli announced a plan to decarbonize the fund by 2040, starting with divestment from eight oil and gas firms valued at $26.8 million. This decision was made after a broader review of the transition readiness of energy sector investments, acknowledging the significant climate risk they face. The state's pension fund, valued at over $226 billion, is the largest in the world to take such comprehensive climate action.
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New York State pension fund divests from tar sands companies
New York State has taken a significant step towards addressing climate change and the risks associated with fossil fuel investments. In April 2021, the New York State Comptroller, Tom DiNapoli, announced that the New York State Common Retirement Fund had completed a review of its tar sands holdings and decided to divest from seven tar sands companies. This fund, valued at over $226 billion to $246 billion, is one of the largest pension funds in the world, and its decision to divest from these companies is a powerful statement and a historic moment.
The seven companies that the New York State Pension Fund has divested from include Imperial Oil, Canadian Natural Resources, Husky Energy, MEG Energy Corp., Athabasca Oil Corporation, Cenovus Energy, and Japan Petroleum Exploration. These companies were found to present a significant financial risk to the fund due to their lack of transition plans and alignment with the Paris Climate Agreement goals, particularly the goal of keeping temperature rise to 1.5 degrees.
The decision to divest from tar sands companies is part of a broader trend of investors moving away from the oil sector and towards renewable energy sources. This shift has been accelerated by the collapse of oil prices in 2015 and 2016, which led to job losses in Canada's oil industry and growth in the clean energy sector. By 2017, Canada's clean energy sector was outpacing the rest of the country's economy, creating nearly 100,000 more jobs than the mining, quarrying, and oil and gas extraction sectors combined.
The New York State Pension Fund's decision to divest from tar sands companies is a result of years of campaigning by the DivestNY coalition, a multigenerational and multiracial effort comprising over 40 groups. The coalition was formed after Superstorm Sandy devastated the Northeast in 2012, causing nearly $70 billion in damages. With this recent victory, the coalition will now focus its efforts on the NYS Teachers' Retirement System, the seventh-largest retirement system in the country, to divest from fossil fuels as well.
The New York State Comptroller, Tom DiNapoli, has shown exceptional climate leadership and a commitment to transparency and protecting retirees and taxpayers from risky fossil fuel investments. The fund has also committed to investing more than $20 billion in climate solutions, including sustainable investments such as green bonds and renewable energy infrastructure. This decision by the New York State Pension Fund sets a precedent for other pension funds worldwide to follow and demonstrates that addressing climate change and transitioning to renewable energy sources are not just environmentally responsible but also financially prudent.
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New York City bans fossil fuels in new buildings
New York City has taken a significant step in the transition away from fossil fuels by banning them in new buildings. In 2021, Mayor Bill de Blasio signed a landmark bill into law, making New York City the first large, cold-weather city to phase out the combustion of fossil fuels in new buildings. This law sets emissions limits for new residential and commercial buildings, bringing immediate health and climate benefits to New Yorkers. It also accelerates the construction of all-electric buildings, with all new buildings required to be fully electric by 2027.
The ban on fossil fuels in new buildings is part of New York City's commitment to addressing climate change and achieving carbon neutrality by 2050. The law prioritises air quality, public health, and greenhouse gas emissions reductions. By banning fossil fuel appliances, a primary source of indoor air pollution, the law also improves the health of New Yorkers. According to research by the Rocky Mountain Institute, the law will prevent 2.1 million tons of carbon emissions by 2040, which is equivalent to taking 450,000 cars off the road for a year.
The fossil fuel industry has faced strong opposition from New York City, with the city taking a stand against natural gas and other fossil fuel usage in new buildings. This move has been supported by various groups, including New York Communities for Change and the American Institute of Architects (AIA) New York. The ban on fossil fuels in new buildings is a significant milestone, as New York's large market influence will help drive the overall market toward electrification.
Additionally, New York City has also achieved a significant divestment from fossil fuel companies, totalling an estimated $3 billion. This includes divestment from the New York City Employees' Retirement System (NYCERS) and the New York City Board of Education Retirement System (BERS). The city has recognised the financial and environmental risks associated with fossil fuel holdings and has committed to achieving net-zero greenhouse gas emissions in investment portfolios by 2040. New York City is leading the way toward a sustainable future, demonstrating that environmental and fiscal responsibility can go hand in hand.
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New York City sues top fossil fuel corporations
New York City has successfully divested from fossil fuels, with New York City's pension funds achieving the first-ever pension fund divestment from fossil fuel reserve owners. This move, led by Comptroller Scott M. Stringer and trustees of the New York City Employees' Retirement System (NYCERS) and the New York City Board of Education Retirement System (BERS), resulted in a total divestment of approximately $3 billion.
In January 2018, the trustees announced their goal to divest from fossil fuel reserve owners within five years, making New York City the first major city in the nation to commit to divesting public pension funds from fossil fuel companies. The decision was based on extensive fiduciary processes and investment analyses that highlighted the risks posed by fossil fuel companies.
Following this successful divestment, New York City has also partnered with C40 and London to engage other cities to promote fossil fuel divestment. Additionally, Comptroller Stringer and trustees announced a commitment to achieve net-zero greenhouse gas emissions in their investment portfolios by 2040, doubling investments in climate change solutions.
In line with this, New York State has also made significant strides toward divestment from fossil fuels. New York State's Common Retirement Fund, valued at over $226 billion, has decided to divest from the riskiest fossil fuel companies, with State Comptroller Tom DiNapoli announcing a plan to decarbonize the fund by 2040. This is a historic moment, as New York State is the largest pension fund in the world to take such comprehensive climate action.
Furthermore, New York City's decision to divest from fossil fuels is accompanied by legal action against the top five fossil fuel corporations: ExxonMobil, Shell, BP, Chevron, and ConocoPhillips. New York City is suing these companies, charging them with hiding evidence that burning fossil fuels causes climate change, resulting in billions of dollars spent on climate remediation. This movement to divest and hold fossil fuel companies accountable demonstrates New York City's commitment to addressing the climate crisis and promoting a sustainable future.
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New York City partners with C40 and London to promote divestment
New York City has been making strides to grow the fossil fuel divestment and sustainable investment movement. In 2018, NYC partnered with London to co-chair C40's Divest/Invest Forum, a first-of-its-kind initiative to help urban leaders take action. The forum has provided direct support to dozens of cities, helping them develop their pension strategies. In 2020, NYC and London released a toolkit for cities, providing a how-to guide for divestment and sustainable investment. The forum has 14 participating cities, including Auckland, Melbourne, and Stockholm, and has recruited 18 signatory mayors representing 50 million residents and over $400 billion in pension assets.
Through its partnership with C40 and London, New York City has promoted divestment from fossil fuels and investment in a sustainable future. The city has committed to removing fossil fuel assets from investment portfolios and increasing assets in sustainable companies and projects. This recognizes the dangerous business models of fossil fuel companies, which emit planet-warming and health-harming pollution and underperform in the stock market. New York City's pension funds have successfully divested an estimated $3 billion from fossil fuel companies, making it one of the largest fossil fuel divestments in the world.
The C40 Divest/Invest Forum has been instrumental in galvanizing global action on divestment and sustainable investment. The forum provides a platform for cities to collaborate and share their progress and experiences in divesting from fossil fuel companies. The toolkit developed by New York City and London offers a clear pathway for other cities to follow suit, demonstrating that taking action on divestment is achievable and essential for the planet's future.
New York City's leadership in the Divest/Invest movement has inspired other cities to join the pledge to divest from fossil fuels and invest in climate solutions. As of February 2023, 18 cities have committed to C40's "Divesting from Fossil Fuels, Investing in a Sustainable Future" pledge, including London, New York City, Berlin, Bristol, Cape Town, and Vancouver. This growing movement sends a strong signal to the fossil fuel industry and demonstrates the commitment of cities to address the climate crisis and build a greener and more sustainable future.
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Frequently asked questions
Yes, New York State has divested from 7 tar sands companies, making it the first state pension fund in the US to join the tar sands investor exodus.
The New York State Common Retirement Fund was valued at over $226 billion.
The decision was made by State Comptroller Tom DiNapoli, who announced a plan to decarbonize the fund by 2040.
The divestment sent a strong message to the fossil fuel industry and demonstrated New York's commitment to addressing climate change. It also encouraged hundreds of other institutions, governments, and entities to make similar commitments.
