In place of an Overnight News Digest this evening, there was head cold, sleeping through an alarm and waking up to find it was too late for a proper diary, followed by an apologetic reaction.
New York lost billions with fossil fuel investments
by Melissa Cronin
In order to measure what sort of impact fossil fuel holdings was having on the New York State Common Retirement Fund’s equity portfolio, Corporate Knights took the 100 biggest companies that the fund has shares in. Of those, the biggest fossil fuel companies, including coal utilities, were removed. Using data about the performance of the top 100 public coal companies provided by Fossil Free Indexes, the fund was then analyzed for how it would fare without these fossil fuel stocks, versus how it fared with them.
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Divesting in fossil fuels has been a hot-button issue for years, with pressure on major universities to scrub their portfolios. Right now, it’s unclear exactly what outcome divesting will have. One study, funded by the oil and gas industry, found that universities could lose millions if they cut their cut oil, gas and coal holdings. Harvard, it reported, would lose up to $108 million per year if it divested from fossil fuel companies. But a slew of other studies have contradicted that finding, suggesting that divesting in fossil fuels can save big money. One analysis by the investment firm Trillium Asset Management directly contradicted the industry-funded findings for Harvard, reporting that the university lost an estimated $21 million dollars over three years by ignoring calls to divest. One 2013 analysis commissioned by the Associated Press found that university endowments would have been better off had they divested a decade previous. Last October, after beginning to divest from all fossil fuels a year earlier, the Rockefeller Brothers Fund announced that its $850 million portfolio was not harmed by the decision.
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The New York pension fund’s investments in fossil fuels have been questioned lately, both by climate advocates and by investors. Last week, Thomas DiNapoli, the New York State Comptroller who manages the pension fund, joined four other Exxon shareholders to demand that the U.S. Securities and Exchange Commission force the company to address how climate change mitigation policies would impact its bottom line. New York’s retirement system invests directly about $1 billion in Exxon, the world’s largest publicly traded oil and gas company. Exxon quickly challenged that resolution — but it seems that today, the Comptroller got his answer.
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For those looking to not make the same mistakes the state of New York and others have, there are easy ways to divest—but you may have to read the fine print to make sure there are no oil smears left on your money. Like many universities and corporations that have already pulled their stakes out of the grip of Big Oil, it’s an measurable way to contribute to the climate movement. What’s more, it may save you a whole lot of money.