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New York City’s top pension funds will cut out $4 billion in fossil-fuel investments, following through on an earlier pledge, Mayor Bill de Blasio and Comptroller Scott Stringer said.
The divestment is expected to be one of the largest in the world, according to the officials, who cited both financial and environmental risks. In 2018, New York City became the first major city in the nation to commit to divesting major public pension funds from fossil-fuel reserve companies. The divestment is expected to be complete within the original five year timeline pledged by the city.
“Since the initial announcement hundreds of other institutions, governments, and entities have joined this commitment,” they said in a release.
New York State’s $226 billion pension fund, one of the world’s largest and most influential investors, said last month it will eliminate many of its fossil-fuel stocks in the next five years.
In addition to the split from oil, gas, oil-services and pipeline companies the state fund will sell shares in other companies that it feels contribute to global warming, by 2040, the state comptroller said at the time.
“Fossil fuels are not only bad for our planet and our frontline communities, they are a bad investment,” de Blasio said. “Our first-in-the-nation divestment is literally putting money where our mouth is when it comes to climate change.”
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The funds include the New York City Employees’ Retirement System (NYCERS) and New York City Teachers’ Retirement System (TRS). The New York City Board of Education Retirement System (BERS) is expected to move forward on a divestment vote imminently.
Investments to be cut were identified based on demonstrated risk from fossil fuel reserves and business activity, and the trustees will continue to evaluate risk in their portfolios to determine additional actions as warranted, they said. They did not yet name specific stocks.
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The U.S. oil fund USO, -0.39% traded lower Tuesday in part on fading hopes that further stimulus measures could be quickly approved and as COVID-19 vaccination distribution has hit snags. Hopes for this fiscal boost and overall relief that the worst of the pandemic could be past had helped oil and natural gas prices recover, including an 11-month high for oil futures WBS00, -0.38%.
