DiNapoli says companies will ‘reduce risk to their bottom line’ with transparency, clean energy
The New York State Common Retirement Fund is promoting social responsibility by investing with companies that encourage green energy and greater transparency on political spending, said state Comptroller Thomas DiNapoli, whose office oversees the fund.
“We are very engaged investors and seek dialogue with companies in which we own shares to improve their performance on a range of environmental, social and governance issues (ESG),” DiNapoli said in a statement. “It is my firm belief that when companies take ESG issues into consideration, they reduce risk to their bottom line and can improve long-term performance for shareholders.”
From 2010-15, the fund filed 286 shareholder resolutions on ESG issues, and in 119 instances, the companies agreed to meet the state’s ESG requests, the comptroller’s office said. In 2015, the fund filed 48 shareholder resolutions and the state was able to reach agreements on half of those resolutions.
New York has a long history of investing with companies that take steps to lower emissions, prepare for new regulatory requirements or open their business to alternative energies, DiNapoli said.
Recently, the state created a $2 billion low-carbon index that weights investments in publicly held companies based on their emissions. The goal is to lower or eliminate holdings with high-carbon emitters and increase the state’s stake in lower emitters.
“I was pleased that this year the fund earned the highest grade possible from the Asset Owners Disclosure Project, which focuses on best practices in addressing climate change,” DiNapoli said in a statement. “The fund was ranked first in active ownership and sixth overall among the 500 global investors assessed.”
Since the U.S. Supreme Court decision in Citizens United v. FEC, investors have limited information on how and where corporate dollars are being spent in politics. Since 2010, New York state has persuaded 27 major corporations to adopt a request for full disclosure of both direct and indirect corporate political spending.
In 2015, DiNapoli’s office filed a request for political spending disclosure with 14 companies and reached an agreement with five, including Delta Air Lines, Eastman Chemical, Marathon Oil, U.S. Steel and Valero Energy.
“When companies fail to respond to our requests we may take the next step and file a formal shareholder resolution which is subject to a vote by fellow shareholders,” DiNapoli said.
After the Sandy Hook school shooting in 2012, DiNapoli directed his staff to freeze all investments with companies whose primary business was manufacturing guns and existing shares were subsequently sold.
“As an investor, the New York Common Retirement Fund strives to achieve a double-bottom line in which we make money to strengthen our pension fund but are also able to invest in areas that benefit the larger world,” DiNapoli said.