The New York State Common Retirement Fund, Albany, plans to restrict investments in seven oil sands companies and eventually divest its $7 million holdings in them, Thomas DiNapoli, the state comptroller and sole trustee of the $247.7 billion pension fund, announced Monday.
"The fund will not directly purchase or directly hold debt or equity securities, or invest through an actively managed account or vehicle, in these companies," a news release from the comptroller's office said. Existing investments "will be sold in a prudent manner and time frame."
The action is part of Mr. DiNapoli's pledge to reduce investment risks in the pension fund tied to fossil fuels with a goal of net zero greenhouse emissions by 2040.
"We have carefully reviewed companies in the oil sands industry and are restricting investments in those that do not have viable plans to adapt to the low-carbon future," Mr. DiNapoli said in the news release. "Companies responsible for large greenhouse gas emissions like those in this industry, pose significant risks for investors."
The news release identified the seven companies that "failed to show they are transitioning out of oil sands production: Imperial Oil, Canadian Natural Resources, Husky Energy, MEG Energy, Athabasca Oil, Cenovus Energy and Japan Petroleum Exploration.
These companies produce a heavy type of crude oil from oil sands whose "production is more costly and carbon-intensive than other forms of crude production," the news release said.
In December, Mr. DiNapoli announced a plan to reduce pension fund investments in energy companies, leading to the net-zero carbon emissions target by 2040. He said divestment is a "last resort" that will be used if companies don't follow the pension fund's guidelines for reducing carbon emissions.
Last year, the pension fund divested holdings in 22 thermal coal companies with assets of $40 million. The pension fund will next evaluate shale oil and gas companies, the news release said.