New York State Common Retirement Fund, Albany, pitched a perfect game this proxy season with its climate-related shareholder proposals, reaching agreements with all seven portfolio companies with which it filed.
State Comptroller Thomas P. DiNapoli, trustee of the $254.8 billion pension fund, said in a news release Tuesday that it was the first proxy season in which the fund achieved agreements on all such proposals.
"A low-carbon economy is becoming a reality with more and more companies recognizing the need to adapt their businesses and address the financial risks posed by climate change," said Mr. DiNapoli, who pledged to continue engaging with portfolio companies to encourage climate-risk management, strategic planning and reporting.
Four of the companies — Domino's Pizza, medical-supply company McKesson, commercial real estate company Realty Income, and Advance Auto Parts — agreed to adopt the best practice standards of the Science Based Targets initiative for reducing greenhouse gas emissions.
McKesson also agreed to set the Science Based Targets in line with a 1.5-degree scenario outlined in the Paris Agreement.
In other agreements, steel-maker Cleveland-Cliffs set greenhouse gas emission targets and committed to co-funding an environmentally friendly hydrogen project, while chemical-maker Albemarle committed to adopting emission targets, and water treatment company Pentair agreed to set targets for greenhouse gas emissions and clean energy.
Directors of companies not perceived as addressing climate risks were not so lucky.
Mr. DiNapoli said the pension fund voted against a record number of director nominees at those companies: 387 individual directors at 72 companies, including Chevron, Exxon Mobil, Berkshire Hathaway and Caterpillar.
The pension fund updated its proxy voting guidelines in 2020 with criteria on how it reviews companies' preparedness for the transition to a low-carbon economy, including when it will generally vote against director nominees at companies not managing climate risks.
New York State Common was one of the backers of candidates put forward by activist investment firm Engine No. 1, which won seats on Exxon's board.
Since 2007, the pension fund has filed more than 150 climate-change-related shareholder resolutions and reached 75 agreements with portfolio companies to analyze climate risks, set reduction targets for greenhouse gas emissions, set renewable energy and energy efficiency goals, prevent deforestation, publish sustainability reports and appoint directors with environmental expertise.