The New York State Common Retirement Fund recently announced they will be doubling their investment in a low carbon-emissions index designed by Goldman Sachs Asset Management. Although this change in investment strategy represents a small portion of their entire portfolio, $4 billion versus over $192 billion, it is a big deal. What the third largest public pension fund in the United States is publicly stating is that they believe they can invest their Fund’s dollars in a way to support companies that positively affect our environment while at the same time achieving market like returns for the State’s plan participants.
For more than a decade, The New York Common Retirement Fund has been on the cutting edge of sustainability efforts. In 2004, the Fund was one of the first signatories of the Carbon Disclosure Project (CDP) and, in 2007, the UN’s Principles for Responsible Investment (PRI). To date the Fund has committed over $7 billion to sustainable investing strategies in stocks, real estate and private equity across its portfolio. They believe that efforts to engage companies on Environmental Social and Governance (ESG) issues also protect the Fund’s underlying investments by improving governance practices, mitigating reputational risks and avoiding potential lawsuits.
Coming from Philadelphia, I never thought I would say it but it is true, “We need more New York!”.