New York’s pension fund plans to restrict its investments in shale companies

(Bloomberg) — New York’s $280 billion state pension fund will divest more than $238 million in shares and bonds of oil and gas companies including Pioneer Natural Resources Co., Hess Corp., and Diamondback Energy Inc. 

The move follows an internal review that determined the companies failed to demonstrate viable net-zero transition plans, according to a statement from the state comptroller. The New York State Common Retirement Fund has holdings in 42 oil and gas companies. 

“As market forces and new policies drive the energy transition, we must align our investments with a profitable and dynamic future,” Comptroller Thomas P. DiNapoli said in a statement. “The shale oil and gas industry faces numerous obstacles going forward that pose risks to its financial performance.” 

The divestment comes as oil and gas stocks lead market gains on the back of higher commodity prices and reduced spending. Hess and APA Corp., two of the fund’s divestment targets, are among the top 10 performers in the S&P 500 index this year. All 10 are oil and gas companies.