New York State pension fund puts 27 coal companies under review

[January 30, 2020]  By Ross Kerber

BOSTON (Reuters) - New York state's top pension fund official said it was reviewing whether to divest from 27 coal companies and could make decisions on $98 million in holdings within two months.

The reviews by the third-largest U.S. state pension system, with $211 billion under management, could set the tone for other retirement plans facing public concerns about climate change.

New York State Comptroller Thomas DiNapoli in an interview on Tuesday said his office began reaching out several weeks ago to companies with at least 10% of revenue from thermal coal, or coal burned to produce electricity.

The pension fund sent letters asking how much they are spending to move away from coal burned to produce electricity, how much of their revenue stems from low-emission technologies, among other factors. He declined to estimate how many companies might be excluded.

"We want to stay broadly invested, and a lot of our investment is through passive vehicles. But we want to be sure companies are positioned for the long term," he told Reuters.

Under review are Arch Coal Inc, Consol Energy Inc, and Peabody Energy Corp among others.

Representatives for Arch, Consol and Peabody did not immediately respond to requests for comment.

Coal mining stocks have been under pressure as utilities have turned to other fuel sources such as natural gas and renewables, cutting total U.S. carbon emissions in four of the past five years.

The shares make up just a fraction of the $211 billion in total assets of the state public pension system, making any decision somewhat symbolic, DiNapoli acknowledged.

Other pension systems have taken similar steps including the largest, the California Public Employees' Retirement System, which said in 2017 it had sold stock in 14 companies including Arch and Peabody, following a state law requiring it to study and potentially divest from the sector.

But at the time it identified three other thermal coal companies not subject to divestment "because they had indicated plans to transition their business models to adapt to clean energy generation."

DiNapoli intends to begin reviews of other energy holdings, such as for investments related to oil sands projects, as soon as this year, he said.

(Reporting by Ross Kerber in Boston and Gary McWilliams in Houston)

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