New York State Common Retirement Fund, Albany, will divest $238 million in public equity and public debt holdings from 21 shale oil- and gas-producing companies, said Thomas P. DiNapoli, state comptroller and sole trustee of the $279.7 billion pension fund, Wednesday.
"As market forces and new policies drive the energy transition, we must align our investments with a profitable and dynamic future," Mr. DiNapoli said in a news release. "The shale oil and gas industry faces numerous obstacles going forward that pose risks to its financial performance, To protect the state pension fund, we are restricting investments in companies that we believe are unprepared to adapt to a low-carbon future."
The pension fund reviewed 42 companies, and it determined that 21 "failed to show viable transition strategies" to stronger pollution control efforts, the news release said. "These securities will be sold in a prudent manner and time frame, consistent with the comptroller's fiduciary duty."
The affected companies, including Pioneer Natural Resources Co., Hess Corp. and Chesapeake Energy Corp., have "failed to demonstrate they are prepared for the transition to a low-carbon economy," the news release said.
Wednesday's announcement is part of Mr. DiNapoli's effort to reduce the risk of fossil-fuel investments' impact on the pension fund's returns, with a goal of having an investment portfolio with net-zero greenhouse gas emissions by 2040.
In April 2021, the pension fund said it woulds restrict its investments in seven oil sands companies and divest its $7 million in holdings in them. In 2020, the pension fund divested holdings of $40 million in 22 thermal coal companies.