$184b Retirement Fund Joins Decarbonization Coalition

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Stockholm (NORDSIP) – Joining the global effort to reduce the carbon footprint, The New York Common Retirement Fund (CRF), the third largest pension fund in the U.S. with $184.5 billion in assets, has joined the Portfolio Decarbonization Coalition (PDC), a coalition of 28 international investors controlling over $3 trillion in assets.

The PDC has pledged to gradually decarbonize $600 billion’s worth by creating investment portfolios designed to have a smaller climate change impact. The plan was announced at the Paris climate talks last year by New York State Comptroller Thomas DiNapoli, a trustee of CRF. The CRF has consequently developed a low emission index in partnership with Goldman Sachs, which increases investments in carbon-efficient companies and steers away from large emitters.

“Climate change is one of the greatest risks to our pension fund’s portfolio,” Mr. DiNapoli said. “We’re reviewing and adjusting our investments to reduce that risk and take advantage of the growing opportunities of a lower carbon future. Investors are playing a key role in fostering a cleaner global economy. The PDC gives us the opportunity not only to highlight our own activities in this regard, but also to share insights and challenges with counterparts around the world.”

“Investments with more carbon translate to higher risk, not just from potential carbon fees or pricing, but also from shifts in technology that can leave high carbon assets stranded,” added Erik Solheim, Head of UN Environment, whose Finance Initiative is a co-founder of the PDC. “The success of the Portfolio Decarbonization Coalition is a clear signal to both governments and companies that climate change, and the corporate response to it, is critical to shareholder value and investor interests going forward,” Mr. Solheim said.

Other investor members of the PDC include major European funds such as France’s ERAFP ($26.9 billion) and FRR ($38.5 billion), the Dutch giant ABP ($481.1 billion) and the world’s largest insurance company, Germany’s Allianz Group.

“We are seeing significant international collaboration among leading asset owners to push on climate issues,” said Lance Pierce, President of CDP North America, the international not-for-profit organization holding the world’s largest collection of self-disclosed corporate environmental data and a PDC organizer. “Climate change is requiring transformational changes in the economy in order to safeguard assets and supply chains, and presents a significant economic growth opportunity. The US renewable energy sector employed 769,000 people and the solar industry grew 12 times faster than overall job creation in 2015. Investors are realizing they can reduce carbon, reduce risk and generate steady financial returns as well as jobs,” he added.

Picture: (c) Alex-Mit—shutterstock.com

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