The New York State Common Retirement Fund has committed an additional $2bn to the MSCI World ex-USA Climate Change Index strategy, the state comptroller Thomas P. DiNapoli has announced.
The MSCI mandate aims to address climate-related risks by increasing the weighting of companies that engage in climate solutions and decreasing the weighting of companies that face greater climate transition risks.
According to the $267.7bn retirement fund the index aims to reduce its overall scope 1, 2 and 3 greenhouse gas emissions intensity by a minimum of 30% relative to its benchmark.
The New York pension fund’s investment follows an initial allocation of $1bn made in March 2023 to the mandate.
Overall, the New York State Common Retirement Fund has deployed over $22bn to its Sustainable Investments and Climate Solutions program, commitments include, $300m to Copenhagen Infrastructure V, $200m to Caryle Renewable and Sustainable Energy Fund II, $450m EQT Fund VI and $375m to Fundamental Empire Fund.
“To foster long-term financial success, it is essential to address the climate-oriented investment challenges faced by the fund’s portfolio. Climate change is an increasingly urgent risk facing all investors,” P. DiNapoli said.
The retirement fund also announced that it had reached climate-related agreements with five portfolio companies during the 2024 proxy season.
The fund has reached agreements with Southwest Airlines and steel-maker Cleveland-Cliffs to set greenhouse gas emissions reduction targets and publicly disclose climate transition action plans.
The utility WEC Energy Group also committed to publicly disclosing a feasibility study on integrating climate metrics into its executive compensation plan. The fund said it had also succesfully engaged with McDonald’s to assess supply chain water-related business risks and set water quality and quantity targets.
In addition, Realty Income agreed to adopt and publish a low-carbon transition plan.
