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ESG

N.Y. State Common to double low-carbon equity index investment to $4 billion

The New York State Common Retirement Fund, Albany, is increasing its investment in a low-emissions equities index by $2 billion, doubling the size of an investment vehicle that excludes or reduces holdings of high-polluting companies while investing in more environmentally friendly companies.

The formal announcement will be made Wednesday​ by Thomas DiNapoli, the state comptroller and sole trustee of the $201.3 billion pension fund, at the 2018 Investor Summit on Climate Risk in New York.

"We've successfully shifted significant holdings to lower-carbon companies without losing value," Mr, DiNapoli said in remarks prepared for the summit.

"Our investment decisions and our shareholder engagements are a caution to corporations: If they're not helping build a decarbonized future, they may get left behind," he added. "Our strategy for sustainable, lower-carbon investing is working and will continue to expand."

The additional $2 billion will come from the pension fund's regular index holdings, according to a news release to be issued Wednesday. The extra allocation will bring the value of the pension fund's sustainable investments to more than $7 billion, the news release said.

The low-carbon index "demonstrates to other institutional investors that we can decarbonize our portfolios prudently and without risking value," said Vicki Fuller, the pension fund's chief investment officer, in the news release.

The index, which was launched in January 2016, is managed internally. It was developed with Goldman Sachs Asset Management.

"It is modeled on the (pension) fund's existing indices of domestic stocks, particularly the Russell 1000, which are passive investments in the largest domestic companies with returns that match broad market performance," the news release said.