New York State Pension Fund Commits $2.4 Billion to Climate Investment Strategies

The New York State Common Retirement Fund, one of the largest public pension plans in the U.S., announced the allocation of $2.4 billion to its Sustainable Investments and Climate Solutions (SICS) Program through investments in three climate-focused investment funds.

State Comptroller Thomas P. DiNapoli also announced that the fund completed its annual review of thermal coal, oil sands, shale oil and gas, and integrated oil companies, resulting in new restrictions on investment in eight coal and shale oil and gas companies determined to be not prepared for the transition to a low-carbon economy, and the removal of 11 companies from the restricted list. The fund said that it will sell its investments in the newly restricted securities, valued at over $31 million.

DiNapoli said:

“Climate change poses a real threat to our investments, but the actions announced today will help position the Fund to address those risks and seize on opportunities generated as the world transitions to a low-carbon economy.”

The new investment commitments include a $2 billion allocation to the FTSE Russell TPI 1000 Climate Transition Index, part of a series of indices by FTSE Russell designed to reflect the performance of global and diversified indices, while weighting constituents to account for risks and opportunities associated with the transition to a low carbon economy. Constituents in the index series are assessed on a series of climate considerations including exposure to green revenues, fossil fuel reserves and operational carbon emissions, climate governance activities, and forward-looking commitments to carbon emission pathways. The New York pension fund previously allocated $2 billion to the index fund in 2021.

Additional new allocations include $250 million to the Oaktree Power Opportunities Fund VII, which targets investments supporting infrastructure, including electric power, solar, and water systems, and $150 million to the Vision Ridge Partners Sustainable Asset Fund IV, which focuses on climate mitigation and adaptation through investments identifying, developing, and transforming assets across energy, transportation, and agriculture, primarily in North America.

The new investments follow the launch by the fund of a goal in 2019 to commit $20 billion to sustainable investments, which was subsequently raised to a target of $40 billion by 2035, after the initial goal was passed in 2024. To date, the fund has deployed more than $26.5 billion towards its $40 billion target.

DiNapoli added:

“The Fund is a leader on addressing the investment challenges posed by climate change and our efforts continue. Over one million members and beneficiaries depend on the Fund’s long-term strength for a secure pension. These latest investments continue our commitment to prudently reduce risks to our portfolio and protect the Fund.”