New York pension fund to review investments in coal companies

31 January 2020 (Last Updated January 31st, 2020 12:21)

The New York State Common Retirement Fund – the third-biggest public pension fund in the US – has announced its plan to review investments for 27 thermal coal mining companies.

New York pension fund to review investments in coal companies
Credit: Pixabay.

The New York State Common Retirement Fund – the third-biggest public pension fund in the US – has announced its plan to review investments for 27 thermal coal mining companies. The decision was announced on Wednesday by the fund’s comptroller Thomas DiNapoli and aims to determine if the listed companies, including Anglo American and Bangkok-based Banpu, are taking adequate steps to transition into a more sustainable business model.

The companies under review were chosen because they make at least 10% of their revenues from mining thermal coal, said the fund.

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.”

After requesting information, the fund will review each company’s strategy to move away from coal mining. The standards assessed will include companies’ efforts to align with the 2015 Paris Agreement to keep the increase of global temperatures below 2 °C by 2050, their attempts to reduce expenditures on coal and emission of greenhouse gases.

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,” said DiNapoli.

Anglo American spokesperson Katie Ryall said the company has already taken significant steps to this end, reducing its thermal coal production by half. Ryall said: “We have said before that we are on a pathway away from thermal coal production, but that we will do this responsibly, doing what is right by our employees, host communities, host governments and shareholders.”

According to the Responsible Mining Index – an index drawn up by the Responsible Mining Foundation that promotes sustainable mining – Anglo American occupies the third place in the top 30 companies for Environmental Responsibility best practice, while Banpu is in the 14th place.

The review is part of DiNapoli’s Climate Action Plan – a strategy released in June 2019 to address the risks and opportunities related to climate change. The plan includes $20bn directed to sustainable investments and a minimum standards for companies that can influence divestment decisions.