NY State Pension Fund Scrutinizes Shale Oil, Gas Companies

The fund will evaluate 42 firms that it says are ill prepared for a transition to a low-carbon environment, includingConocoPhillips, Hess, and Marathon Oil.

The $254.8 billion New York State Common Retirement Fund is evaluating 42 publicly traded shale oil and gas companies to determine if they are prepared for the transition to a low-carbon economy.

The fund said it will scrutinize companies that derive more than 10% of their revenue from crude oil and gas production from shale, including major energy companies such as ConocoPhillips, Hess Corp., and Marathon Oil Corp. It said companies that produce oil and gas from shale face financial risks from diminishing cost competitiveness, increasing climate regulation, and declining fossil fuel demand.

“A low-carbon economy is already becoming a reality and companies that aren’t prepared for it could pay a heavy financial cost,” New York State Comptroller Thomas DiNapoli, who is the pension fund’s trustee, said in a statement. “Shale oil and gas companies face significant economic, environmental, and regulatory challenges. We will carefully review these companies and may restrict investments in those that do not have viable plans to adapt.”

The fund has asked the companies under review to provide additional information within 60 days that shows how they are developing, adopting, or implementing low-carbon transition strategies. The evaluations are part of DiNapoli’s Climate Action Plan, which is intended to lessen investment risks posed by climate change, and help the fund’s investment portfolio transition to net-zero greenhouse gas emissions by 2040.

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DiNapoli also said the fund would restrict investments in five coal producing companies: New Hope Corp., PT Indo Tambangraya Megah Tbk, Semirara Mining and Power Corp., Shanxi Coking Coal Energy Group Co., and Whitehaven Coal Ltd. He said the fund will not directly purchase or hold debt or equity securities in the companies, nor will it invest in them through an actively managed account or vehicle. He said approximately $1.8 million in such securities are currently held by the fund and will eventually be sold “in a prudent manner and time frame.”

Last year, DiNapoli put coal companies under a similar review, which led to the fund divesting from 22 companies that failed to demonstrate transition readiness. And earlier this year, DiNapoli announced the fund would restrict investments in seven oil sands companies after conducting its initial transition readiness assessment. He said the fund decided to ban investments in oil sands companies because they produce a heavy type of crude oil that is more costly and carbon-intensive than other forms of crude production.

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Tags: coal producers, evaluations, Gas, New York State Common Retirement Fund (NYCRF), oil and gas, shale, Thomas P. DiNapoli

The Investment Management Corporation of Ontario (IMCO) has named Rossitsa Stoyanova as its chief investment officer to oversee the firm’s C$73.3 billion (US$58.5 billion) in assets under management (AUM) and lead its senior investment team. She will succeed CIO Jean Michel, who is leaving the firm Sept. 10 after a little more than three years in the position to pursue other opportunities.

“I would like to thank Jean for his dedication and contributions over the past three years,” President and CEO Bert Clark said in a statement. “Under his leadership, IMCO achieved critical milestones in executing its investment strategy and we are strongly positioned for the future.”

Stoyanova, who will start Sept. 13, will report to Clark and will be based in IMCO’s Toronto office. She was most recently managing director and head of portfolio design and construction at the US$396.8 billion Canada Pension Plan Investment Board (CPPIB), where she also oversaw the fund’s risk appetite and allocation. Before joining CPPIB, Stoyanova was a vice president at GE Energy Financial Services in Stamford, Connecticut, where she was responsible for due diligence and structuring acquisitions in the power sector. She also worked in assurance and advisory services at Deloitte & Touche in Chicago.

“Rossitsa’s investment expertise and depth in risk management, combined with her extensive expertise in portfolio design, make her uniquely positioned to be our chief investment officer,” Clark said in a statement. “Her vision and approach will be a critical component to the ongoing creation of value for our clients and will be essential for IMCO growth and progress in the coming years.”

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Stoyanova earned an undergraduate degree at Saint Mary’s College in Indiana, and received her Master of Business Administration from the Kellogg School of Management at Northwestern University in Illinois.

“IMCO’s mandate is both challenging and exciting and I look forward to being a part of the organization’s next phase of growth,” Stoyanova said.