May divest from companies that fail review
The New York State Common Retirement Fund, the third largest pension fund in the U.S., with $210 billion AUM, announced that it is reviewing 27 thermal coal mining companies to determine whether they are taking steps to transition to a more sustainable business model in line with the growing low carbon economy.
New York State Comptroller Thomas P. DiNapoli announced the review as part of his Climate Action Plan to further decarbonize the state pension fund’s investments. DiNapoli explained:
“Investors who fail to face the risks and seize the opportunities presented by climate change put their portfolios in jeopardy,” DiNapoli said. “We are assessing minimum standards for transition readiness at coal mining companies first, because they face the greatest risk as the world turns to cleaner and renewable energies. If a particular company is not ready to move away from its reliance on thermal coal mining for profits, we may divest our holdings in that company.”
Large investors reconsidering coal
The pension fund’s review puts it in line with a growing list of investors reconsidering the climate impact of their portfolios. Earlier this month, investment giant BlackRock announced it would divest from any company earning more than 25% of revenues from thermal coal from its actively managed portfolios. The New York State Common Retirement Fund review will target companies that earn at least 10% of revenues from mining thermal coal.
DiNapoli has sent requests for information to the companies, and will evaluate each company’s strategies for moving away from coal mining. The fund will assess each company’s efforts to align their business model with the Paris Agreement’s goals by reducing capital expenditures on coal, setting long-term targets to reduce greenhouse gas emissions, improving climate reporting, and increasing revenue from low-carbon or green technologies.
The fund may divest from companies that fail the assessment.
The 27 companies under review are:
• Anglo American plc
• Arch Coal, Inc.
• Banpu Public Company Limited
• China Coal Energy Company
• China Shenhua Energy Company Limited
• CIMIC Group Limited
• Coal India Ltd.
• ConsolEnergy Inc.
• ConturaEnergy, Inc.
• DMCI Holdings, Inc.
• Exxaro Resources Limited
• Guanghui Energy Co., Ltd.
• Hallador Energy Company
• Huadian Power International Corp. Ltd.
• Inner Mongolia YitaiCoal Co., Ltd.
• Jastrzebska Spolka Weglowa SA
• NACCO Industries, Inc.
• Peabody Energy Corporation
• PT Adaro Energy Tbk
• PT Astra Internaional Tbk
• PT Bukit Asam Tbk
• PT United Tractors Tbk
• Shaanxi Coal Industry Co., Ltd.
• Shanxi Lu’An Environmental Energy Development Co., Ltd.
• South32 Ltd.
• Washington H.Soul Pattinson and Company Limited
• Yanzhou Coal Mining Company Limited