New York State teachers pension fund has ‘upped coal holdings to $300m’

Move is at odds with other public pension funds in the state and NYC, which have committed to exiting fossil fuels

The New York State Teachers’ Retirement System (NYSTRS) has more than $300m invested in coal companies, having increased its exposure by $70.5m in Q4 of 2020, a report by climate change campaign group DivestNY has revealed.

The pension fund currently owns stocks in 36 companies identified by the Carbon Underground Coal 100 List as among the top owners of coal reserves, including Chinese firm Shaanxi Coal Industry, which is considered to have the second largest coal reserves in the world.

DivestNY noted that it is likely that NYSTRS’s coal holdings are larger than reported as the fund has an additional $30bn invested in financial vehicles that aren’t publicly disclosed.

NYSTRS has yet to publish a climate strategy explaining how it will become Net Zero by 2050, in line with New York's climate laws. 

The fund’s overall exposure to fossil fuels was estimated at $4.5bn as of last spring, putting it at odds with the New York State Common Retirement Fund, the state’s main pension plan, which divested 22 coal companies last year and has committed to divesting all laggard fossil fuel producers over the next five years. In addition, three of five New York City pension schemes – including NYSTERS’ counterpart for the city’s teachers – have already committed to divesting $4bn from fossil fuels.

The figures could increase the momentum behind a bill currently being considered by state lawmakers which would establish a mandatory exclusion list of coal, oil and gas producers for NYSTRS.

Senator Jabari Brisport, lead sponsor of the bill, said: “As a recent public school teacher, I can tell you just how devastating it is to work so hard every day to protect our community’s future and its children, only to have your pension invested in an industry that’s actively harming that future and those children. The fact that coal is also such a financially risky investment of already under-paid teachers’ pensions adds more insult to injury.”

A separate bill which would force the Common Retirement Fund to divest all major oil and gas producers over the next year has already gained record levels of support among state senators.

NYSTRS has more than $120bn in assets under management, making it among the 10 largest in the US and second only to the $248bn Common Retirement Fund in New York State. 

While there continues to be disagreements about the relative merits of engaging fossil fuel producers, as opposed to divesting, the International Energy Agency’s recent conclusions that new fossil fuel projects are inconsistent with the goals of Paris suggests that investors will face significant climate-related financial risks by continuing to invest in fossil fuel laggards.

NYSTRS had not responded to a request for comment at the time of publication.