Sept 26 (Askume) – Moving money out of coal assets and into a new responsible investment exchange-traded vehicle will give New York state insurance funds access to new assets as they assess the climate and social impacts of their holdings, a senior executive said. A quick win.
Rajith Sebastian, head of ESG and sustainable investing at the $20 billion sovereign fund , said at the Askume Next Newsmaker event in New York that the new allocation “immediately adds a significant amount of investment to our equity portfolio, reducing carbon exposure by 40%.”
Sebastian’s fund provides workers’ compensation, disability and other insurance and has issued climate actions similar to those set by New York’s large public-sector pension funds in 2022.
The insurance fund was set up later than its larger rivals, and Sebastian said it initially hoped to find “quick wins” by shifting part of its portfolio toward goals such as reducing emissions.
One of the measures, he said, would be to impose strict monitoring of any company or asset manager that generates more than 1% of its revenue from coal mining to reduce the carbon risk in its equity portfolio by about 40%.
The move also allows the fund to provide initial capital for a new ETF, the Calvert U.S. Large Cap Core Responsibility Index ETF. “We got a lot of feedback internally,” Sebastian said, citing initial concerns about investing too much in the fund.
Sebastian said state fund holdings now account for half of its assets, about $354 million, up from about 95% initially. “We didn’t even publicize it because we thought let’s do this, this is impressive.”
