The Strategist

US pension funds are found to sponsor global pollution

07/29/2021 - 04:09

Top ten US pension funds remain significant investors in the big corporations contributing the most to pollution, Bloomberg writes. Thus, it appears that organisations claiming to pay attention to environmental issues are sponsoring damage to the planet.

Analysts put the associated investment at around $40 billion, meaning that nine percent of the total investment is made by the 20 high-carbon emitting companies. The figure could be lower, however, as funds in California and New York have reduced their stakes in companies such as oil giant Exxon Mobil since the start of the year.

Nevertheless, such large investments in the sector that contributes most to climate change may surprise those who believe the statements of the funds themselves. The most active in this regard is the New York State Common Retirement Fund, the third-largest public pension fund in the US with some $255 billion in assets. Thomas P. DiNapoli, the New York comptroller in charge of overseeing the state's finances, said in December that the companies in which the fund invests should achieve net zero greenhouse gas emissions by 2040, with almost everyone else in the sector targeting 2050.

Meanwhile, at the end of last year, the New York State Common Retirement Fund's investments in the fossil fuel sector were worth $3.2 billion. However, the fund has already taken steps towards realizing its target, having since the beginning of the year reduced its investments in companies such as Exxon Mobil, Linde, Waste Management and Union Pacific, among others, which are on the list of the highest emitters.

In recent years, companies whose work is damaging to the environment have faced pressure from authorities to accelerate the transition to a "greener" economy and are trying to avoid damage. In Europe, major industrial companies have claimed that the EU may not be ready for a green energy transition and have suggested that Brussels allocate more money for its development. When the EU published its ambitious climate protection plan, big businesses accused it of creating risks for investment and innovation.