Trustees of two of New York City's largest pension funds have voted to exit approximately $4 billion worth of investments related to fossil fuel companies, the New York City Comptroller's office announced Jan. 25.
New York City Employees' Retirement System and the Teachers' Retirement System of the City of New York voted the same day to approve the divestments. The comptroller expects a third fund, the New York City Board of Education Retirement System, "to move forward on a divestment vote imminently."
The announcement follows a trend of investors choosing to move investment out of the fossil fuel sector in an attempt to address climate change.
"Divestment is a bold investment in our children and grandchildren, and our planet," New York City Mayor Bill De Blasio was quoted in a press release calling the divestment among the largest in the world.
"Climate change is the fight of our lives, and we must face it head on with everything we've got," New York City Comptroller Scott Stringer said. "Since we announced our first-in-the-nation divestment goal, the urgent environmental and financial risks of climate change have only grown more clear."
Security investments targeted for divestment were identified by "demonstrated risk from fossil fuel reserves and business activity," the release states. The city plans to release information about the final scope and the names of the companies targeted for divestment after the funds complete the sale of the targeted securities.
In January 2018, pension trustees announced a goal to divest from fossil fuel reserve owners within five years, and the divestments the city announced Jan. 25 will meet that timeline, the comptroller's office said.
While the pension funds shift investments away from fossil fuels, they are buying securities related to renewable energy, climate infrastructure, green real estate, and other investments "that will help achieve the goals of the Paris Climate Agreement." The city said the funds are on track to meet their goal of holding $4 billion worth of "climate solutions" investments by September.
"New York City has set a new bar for climate finance action," said Bill McKibben, co-founder of climate conservation group 350.org, in a press release. "By taking billions out of the companies that own and profit off of fossil fuels, New York City is playing an enormous role in moving the financial industry towards a greener future."
In December 2020, New York State Comptroller Thomas DiNapoli announced the New York State Common Retirement Fund started a process to identify fossil fuel companies for potential divestment by 2025.
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