New York pension fund to dump half of US shale companies from its portfolio

The third-largest pension fund in the United States, the New York State Common Retirement Fund, will sell stakes and bonds in half of the shale companies it invests in because it sees them as ill-prepared for a low future. carbon emissions, Reuters reported on Wednesday. , citing documents from New York State Comptroller Thomas DiNapoli.

The fund, whose estimated value was $258.1 billion as of the fiscal year ending March 31, 2021, will sell stocks and bonds in 21 U.S. shale companies, while retaining its investment in 21 others. companies in the sector. The divestment, valued at a total of $238 million in stock and debt, will include companies including Pioneer Natural Resources, Hess Corp and Chesapeake Energy, according to documents Reuters has reviewed.

Among the companies the New York-based fund will retain are CNX Resources Corp and EQT Corp.

“To protect the state pension fund, we are restricting investments in companies that we believe are unprepared to adapt to a low-carbon future,” DiNapoli said in a statement sent to Reuters.

This could be a good time for the New York pension fund to sell, given that WTI crude oil was the second best performing asset class in 2021 after Bitcoin, according to data from Visual Capitalist.

The New York-based fund said more than a year ago it was undertaking a review of all energy companies it had invested in, to assess their readiness for the energy transition and could shed those considered the riskiest in climate-related investments.

“Those who do not meet our minimum standards may be removed from our portfolio. Divestment is a last resort, but it’s an investment tool we can apply to companies that consistently put the long-term value of our investment at risk,” DiNapoli said in late 2020.

In April 2021, the fund said it would “restrict investments in oil sands companies that have not demonstrated they are prepared for the transition to a low-carbon economy.” The fund planned to sell all $7 million in stocks and bonds of Imperial Oil, Canadian Natural Resources, Husky Energy, MEG Energy, Athabasca Oil, Cenovus Energy and Japan Petroleum Exploration.

The fund’s exposure to oil companies is not large, but it could create a tendency to divest oil sands and shale companies among other institutional investors, given that it is the third largest fund of pension in the United States after CalPERS and CalSTRS of California.

By Tsvetana Paraskova for

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Dolores W. Simon