Canada

New York state pension fund says it's selling off a $7M stake in oilsands

New York's multi-billion-dollar government-run pension fund announced today that it's pulling investments worth more than $7 million out of some of Canada's major players in the oilsands.

The New York State Pension Fund — the third largest such fund in the United States — said it would be selling off securities in several Canadian oilsands companies and would not make future investments in them.

The seven companies are:

Suncor, one of the oilsands' largest players, was not on the list.

The New York State Common Retirement Fund, worth $247.7 billion, manages over a million state and municipal employees' pensions. In December, the fund announced it would transition its financial portfolio to net-zero friendly investments by 2040.

State comptroller Thomas DiNapoli said in a media statement Monday the fund is pulling out of companies that don't have viable plans to adapt to a "low-carbon future."

"As nations around the world become increasingly serious about addressing the threat of climate change, and as market forces drive a low-carbon economic transition, we need to make sure our investments line up with this reality," DiNapoli said. "Companies responsible for large greenhouse gas emissions like those in this industry pose significant risks for investors."

Recently, Sweden's central bank and Norway's sovereign-wealth fund announced similar moves. In May, after Norway's decision, Prime Minister Justin Trudeau said investors worldwide have been looking at the risks associated with climate change.

"That is why it is so important for Canada to continue to move forward on fighting climate change and reduce our emissions in all sectors," Trudeau said.

A man holds a sign outside of the main RBC Royal Bank branch during a protest in Vancouver on Tuesday, June 23, 2020. (THE CANADIAN PRESS/Darryl Dyck)

Trudeau also said companies in Canada's energy sector understand that the way that people invest is changing, and they'll have to change as well. Energy companies such as Cenovus have committed to either achieving net-zero emissions or adopting what's known as ESG (environment, sustainability, governance) policies.

Environmental groups applauded the pension fund's decision. Richard Brooks, Stand.earth's climate finance director, said it's the first state fund to divest from the oilsands and it's "no small matter."

"It's time to pivot to clean, safe renewable energy. That's where the smart money, led by New York, is headed," Brooks said in a media statement.

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