The New York State Teachers go a long way on the fossil fuel strategy


The pension system began examining the financial implications of investing in fossil fuels in March 2019, when members of the board’s investment committee met with a research manager from Goldman Sachs on how energy companies can adapt to climate change, and executives from S&P Dow Jones indices on low-carbon investment strategies, according to a timeline presented by the state Legislature’s board of directors.

Intensive efforts began in September 2020 when members of the investment committee met with environmentalists about fossil fuel divestitures and also with an executive from BlackRock Inc. about sustainable investing.

Thereafter, members of the Board and/or its Investment Advisory Committee met almost monthly on the subject with corporate representatives including Mercer, its ESG Advisor; Reed Smith LLP, his fiduciary adviser; Callan LLC, its general investment adviser; and some of its wealth managers.

Topics discussed include: fossil fuel divestment; Proxy Voting Policies; ESG investment processes; the geopolitics of the energy transition; climate risk assessments; the integration of climate data into the investment process; and disclosure of sustainable investing.

Staff also consulted with state legislators who have introduced fossil fuel divestiture laws, and they discussed ESG investing with organizations like climate advocacy Ceres, which the pension system is a part of.

They also discussed the issues with officials at the $267.8 billion New York State Common Retirement Fund, Albany, and the $270.7 billion New York City Retirement System, which already have fossil fuel divestiture and divestment strategies have introduced.

A few months before the Dec. 28 announcement, the pension system held a virtual meeting with New York Treasury Department officials, including Nina Chen, director of sustainability and climate initiatives, Mr Lee said. The department audits NYSTRS every five years, and the final audit is scheduled to begin this month. Climate change is a new feature of the review.

They discussed the department’s role “in assisting pension plans in assessing the financial risks of climate change and how such risk assessment can best be integrated into the governance structure, business strategies and risk management framework of pension plans,” Herr said Lee on the 9th 8 meeting. “The system employees also discussed the climate protection plan advised by the board.”

On December 20, eight days before the pension system unveiled its ESG strategy, several environmental groups filed a complaint with the Treasury Department, accusing the system of failing to manage climate risk, adding that it “may breach government insurance.” “. regulations and a state law on old-age provision. The groups urged the department during their review to ensure the pension system develops and implements “a comprehensive and transparent plan for a prudent fossil fuel shift.”

Mr Lee, who said he was surprised by the complaint, noted that the ministry did not authorize the pension scheme to publish its formal response. “We welcome any recommendations” from the department, he said.


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