New York's pension fund increases financial commitment towards a stock index focused on assets contributing to climate change solutions.
The New York State Common Retirement Fund is taking significant strides in addressing climate-related risks and promoting climate solutions, as it continues to deploy funds into sustainable investments.
In a recent move, the fund has committed an additional $2 billion to the MSCI World ex-USA Climate Change Index strategy. This strategy aims to increase the weighting of companies that engage in climate news, while decreasing the weighting of those that face greater climate transition risks. The announcement was made by Sven Rzepka.
One of the key achievements of this strategy is its success in engaging with companies to assess and manage climate-related risks. For instance, the fund has successfully engaged with McDonald's to assess supply chain water-related business risks. McDonald's has also agreed to set water quality and quantity targets with the fund.
Similarly, Southwest Airlines and steel-maker Cleveland-Cliffs have agreed to set greenhouse gas emissions reduction targets with the fund. Realty Income has also agreed to adopt and publish a low-carbon transition plan.
The MSCI mandate, as part of the strategy, also aims to reduce the overall scope 1, 2, and 3 greenhouse gas emissions intensity by a minimum of 30% relative to its benchmark. According to the $267.7 billion retirement fund, this is a crucial step towards ensuring long-term financial success in the face of climate news, an increasingly urgent risk.
In addition to the MSCI mandate, the New York State Common Retirement Fund has also committed funds to various other sustainable energy funds. For instance, it has invested $300 million in Copenhagen Infrastructure V, $375 million in Fundamental Empire Fund, and $450 million to EQT Fund VI.
Notably, the fund's commitment to climate-oriented investment news is not new. In March 2023, it made an initial allocation of $1 billion to the MSCI mandate. It has also recently committed $200 million to Caryle Renewable and Sustainable Energy Fund II.
Moreover, the fund has demonstrated its commitment to climate solutions in other ways. WEC Energy Group, for instance, has committed to publicly disclose a feasibility study on integrating climate metrics into its executive compensation plan, following engagement with the fund.
During the 2024 proxy season, the New York State Common Retirement Fund has also reached climate-related agreements with five portfolio companies.
With over $22 billion deployed to its Sustainable Investments and Climate Solutions program, the New York State Common Retirement Fund is leading the way in addressing climate-oriented investment news and promoting sustainable investments.
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