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December 9, 2020

Here’s What You Need to Know About New York’s Net-Zero Announcement

Today, New York’s Comptroller Thomas DiNapoli announced a pledge to have the state’s pension fund reach net-zero emissions across its investments by 2040. This announcement, unlike how some divestment supporters and media have already framed it to be, is not a commitment to fully divest from fossil fuel holdings.

Let’s say that again: The New York State Common Retirement Fund is not committing to fully divest from all fossil fuel holdings.

Rather, DiNapoli has stated the pension fund will opt-in for a systematic, four-year-long review process to examine the pension fund’s investments as they relate to climate risk. DiNapoli is not fully committing to remove these assets from the state’s pension fund, he is merely committing to review perceived risks and establish baseline criteria by which to judge investments in certain sectors.

Read the headline from the New York State Comptroller: “New York State Pension Fund Sets 2040 Net Zero Carbon Emissions Target.”

Their Review Process

It’s important to note that this policy basically continues the policy the Fund has previously adopted to increase sustainable investments and assess investments in terms of “transition readiness” as established in the state’s Climate Action Plan adopted in 2019.

As the State Comptroller clearly lays out in their Next Steps, the State will complete a comprehensive review throughout the next four years of its investments in various subsectors of the energy sector. In their plan the Comptroller states they will utilize what they call “minimum standards” to measure and assess “transition readiness” of each specific investment.

It is important to note that, based on the “minimum standard” criteria, the Comptroller states they would consider removing that specific investment from its portfolio, within the parameters of meeting their fiduciary responsibilities to pensioners.

This process, the Comptroller states, will take place over the course of the next five years, with a complete portfolio assessment by 2025. The Comptroller states it has already completed its review of the thermal coal industry, which then led to removing 22 coal companies from its portfolio. In order to have a transparent review process, the Comptroller states it will release an annual progress report, along with updates after the completion of reviewing each energy subsector.

None of this is that new, it’s been implemented by the Fund over the past few years.

DiNapoli Is Still Opposed to Divestment

For years Divestment Facts has pointed out Comptroller DiNapoli’s opposition towards divestment fossil fuel divestment. Just last month, DiNapoli went on WCNY Radio to discuss the state’s public pension portfolio and responded to several calls for fossil fuel divestment. DiNapoli said none of the experts he convened with recommended it:

“We convened an advisory panel, along with the Governor, of experts with no political agenda to make some recommendations, and they did not include a wholesale divestment of fossil fuel holdings that we have…I’ve got 1.1 million New Yorkers who depend on retirement security from our pension fund, we have a lot of taxpayers who are concerned about how we finance those pensions as well. We don’t want the pensions to become a political football.”

DiNapoli has always been opposed to fossil fuel divestment and today’s announcement does not deter from his record. He has been consistent over the past few years, and today’s announcement doesn’t change that.

In an Albany Times Union op-ed from July, Comptroller DiNapoli defended the State’s pension fund investment strategy as to why they don’t opt-in to divestment:

“There have been some calls lately for the New York state pension fund to divest from fossil fuel companies. They imply New York is a laggard in dealing with climate issues. As legendary radio broadcaster Paul Harvey would say: ‘Now for the rest of the story.’”

Shortly after publishing his opinion piece, DiNapoli reiterated his anti-divestment position in a candid radio interview with WXII AM News:

“You know, in terms of the broader conversation, I think we need to take a step back. We’re a pension fund, we are set up to invest the money that is contributed by public employees and by government employers to invest that money so that we have that money to provide retirement security. We have 1.1 million members, most of those are active employees, state government employees, and local government employees and they depend on our decisions to make sure they have the money for their pensions.”

Last year, the Interim Chief Investment Officer (CIO) of the New York State Common Retirement Fund Anastasia Titarchuk rebuked divestment as ineffective, unconstitutional, costly, and in violation of the Comptroller’s fiduciary duty. In her words:

“All attempts by the legislature to mandate specific investment decisions have been struck down for violating the Comptroller’s independent discretion. Because this legislation, in requiring divestment from 200 specific companies, mandates very specific investment decisions, it would be vulnerable to legal challenges and likely found unconstitutional.”

Ultimately, DiNapoli prefers engagement and collaboration over divestment:

“The risks of climate change, greenhouse gas emissions, controlling them and reducing them is not a question of selling stocks on fossil fuel companies. Every, every entity, organization, corporate sector, we all must be part of that conversation.”


Divestment supporters are declaring victory on this issue on social media and in news coverage. However, the bottom line that pensioners and investment professionals should take away is that the New York State Common Retirement Fund is merely committing to complete a comprehensive review of its portfolio of investments for perceived risks and responding accordingly.

Let’s not forget, New York City supposedly divested several years ago but has yet to even develop an actual strategy for doing so, let alone report out the sale of any fossil fuel investments.

There is no fully fledged commitment to divestment. DiNapoli’s past statements are a testament to this, and as the sole trustee for the NYSCRF, DiNapoli’s past record should serve as the best guide forward for understanding the decisions and outcomes of New York’s state pension fund.