The Teacher’s Retirement System of the City of New York lost approximately $135 million due to investments in oil and gas companies in 2015.
An analysis of publicly disclosed material conducted by investment adviser Advisor Partners on behalf of 350.org has found that New York City’s biggest pension fund, the Teacher’s Retirement System of the City of New York, lost approximately $135 million from investments in oil and gas companies during the fiscal year ending June 30, 2015.
According to Advisor Partners (PDF), the Teacher’s fund saw a decline of more than 25% in its oil and gas stocks during the period in question. Specifically, Exxon Mobil and Chevron Corp were the largest contributors to this downfall, representing a loss of more than $39 million on their own.
“Oil & gas companies are volatile investments,” explained Rahul Agrawal, CIO, Equities, for Advisor Partners. “The fact that these companies underperformed both the US and broader global index by more than 25% confirms the riskiness of these companies. Portfolio managers should carefully reassess their exposure to these securities before investing in them.”
The investments of pension funds have come under close scrutiny over the past year, with many seeing massive losses due to risky fossil fuel investments.
In August of 2015 it was revealed that California’s two public pension funds had lost over $5 billion over the previous year due to investments in the top 200 fossil fuel companies. The California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) were found to have seen a 25% decline in their coal stocks over the previous financial year.
“This is a material loss of money, which directly impacts the strength of the pension fund,” said Matthew Patsky, CEO of Trillium Asset Management, who conducted the analysis on CalPERS and CalSTRS on behalf of 350.org. “Fossil fuel stocks are volatile investments. Investors and fiduciaries should take this moment to reassess their financial involvement in carbon pollution, climate disruption and the financial risk fossil fuels plays in their portfolio.”
Across the ocean, it was revealed in October that UK local council pension funds had lost up to £683 million because of failed investments in coal. Once again, on behalf of 350.org, analysis was conducted (by Platform London) which found that local councils in the UK had lost significant amounts of investment in coal companies, with one such, the Greater Manchester city’s interests in coal, crashing by £148 million.
At the same time as 350.org has been discovering the millions lost to investments in fossil fuel, several pension funds have been acting to minimize their losses. In November of 2014, Norway’s largest pension funds manager KLP announced that it would be divesting its $75 million worth of coal investments. Not long after, two Canadian pension funds announced that they had moved to acquire a portfolio of renewable energy and water infrastructure assets, valued at over $2 billion. In fact, pension funds the world over have been investing heavily in renewable energy — in South Africa, Denmark, and the UK.