New York Common Retirement Fund’s $2bn low-carbon fund
New York State Common Retirement Fund, the US' third biggest public pension fund, has announced it is shifting $2bn of its holdings away from carbon-intensive companies, to a new fund created with the help of Goldman Sachs' asset management division. The fund, which was announced on Friday at COP21 climate conference, will also allocate $1.5bn to a program supporting low-pollution investments, which includes renewable energy projects. According to Vicki Fuller, CIO of the new fund, "by shifting our capital to companies with lower emissions and comparable returns, we are sending the message that our investment dollars will follow businesses with strong environmental practices."

New York State Common Retirement Fund, Albany, created a $2 billion index fund that will invest in companies that emphasize reduced carbon emissions, Thomas DiNapoli, the state comptroller and sole trustee of the $173.5 billion pension fund, announced Friday.

“Our pension fund has long supported climate-aware strategies, and this expansion of our commitment offers a sensible solution that will protect the fund’s investments,” Mr. DiNapoli said in a news release. He made the announcement in Paris, where he is participating in an investors’ panel as part of the United Nations Climate Change Conference.

“By shifting our capital to companies with lower emissions and comparable returns, we are sending the message that our investment dollars will follow businesses with strong environmental practices,” said Vicki Fuller, the pension fund’s chief investment officer, in the news release.

The low-emissions index fund was created in partnership with Goldman Sachs Asset Management. The index fund will be managed internally. The index “will exclude or reduce investments in companies that are large contributors to carbon emissions,” the release said.

Funding will come from the pension fund’s existing index funds, said Matthew Sweeney, a spokesman for Mr. DiNapoli.

“Outright industry exclusions were not the central goal,” Mr. Sweeney said an in e-mail. “Our goal is for all industries, including the highest emitters, to become more carbon efficient and reduce their release of carbon dioxide over time.”

Coal mining, utilities, energy and “material sectors,” such as steel manufacturing, are example of high-carbon-dioxide emitters, Mr. Sweeney added.

Mr. DiNapoli also announced Friday that the pension fund will commit an additional $1.5 billion to its sustainable investment program, whose investments include alternative energy production in the U.S. and worldwide. The pension fund already has invested $1.5 billion in this program.