New York state pension fund says it's selling off a $7M stake in oilsands

New York's multi-billion-dollargovernment-run pension fund announced today that it'spulling investments worth more than $7 millionout of some of Canada's major players in theoilsands.

The New York State Pension Fund the thirdlargest such fundin the United Statessaid it would be selling off securities inseveral Canadian oilsands companies and would not make future investments in them.

The seven companies are:

• Imperial Oil Ltd.

• Canadian Natural Resources Ltd.

• Cenovus

• Husky Energy Inc. (acquired by Cenovus)

• MEG Energy Corp.

• Athabasca Oil Corp.

• Japan Petroleum Exploration Ltd.

Suncor, one of the oilsands' largest players, was not on the list.

The New York State Common Retirement Fund, worth $247.7 billion, manages over a million state and municipal employees' pensions. In December, the fund announced it would transition its financial portfolio to net-zero friendly investments by 2040.

State comptroller Thomas DiNapoli said in a media statement Mondaythe fund is pulling out of companies that don't have viable plans to adapt to a "low-carbon future."

"As nations around the world become increasingly serious about addressing the threat of climate change, and as market forces drive a low-carbon economic transition, we need to make sure our investments line up with this reality," DiNapoli said. "Companies responsible for large greenhouse gas emissions like those in this industry pose significant risks for investors."

Recently, Sweden's central bank and Norway's sovereign-wealthfund announcedsimilar moves. In May, after Norway's decision, Prime Minister Justin Trudeau said investors worldwide have been looking at the risks associated with climate change.

"That is why it is so important for Canada to continue to move forward on fighting climate change and reduce our emissions in all sectors," Trudeau said.

Trudeau also saidcompanies in Canada's energy sector understand that the way that people invest is changing, and they'll have to change as well.

On Monday after the New York fund announced it was divesting, Natural Resources Minister Seamus O'Regan defended the oil and gas works saying they they will lead Canada's clean energy transition.

"The Canadian energy workers who figured out how to pull oil out of sand in the Prairies and out of the treacherous North Atlantic off of Newfoundland are the same people who will build our low-emissions energy future,"O'Regansaid in a statement.

Energy companies such asCenovushave committed to either achieving net-zero emissions or adopting what's known as ESG (environment, sustainability, governance)policies.

Cenovus said in a statement it committed to achieving net-zero emission by 2050, adding it "reflects our commitment to doing our part to address Canada's Paris commitments, along with the rest of society."Cenovus recently purchasedHusky Energy; in the wake of the merger, Cenovus said, it will be setting "new near-term targets."

Environmental groups applaudedthe pension fund's decision. Richard Brooks, Stand.earth's climate finance director, said it's the first state fund to divest from the oilsandsand it's "no small matter."

"It's time to pivot to clean, safe renewable energy. That's where the smart money, led by New York, is headed," Brooks said in a media statement.

Meanwhile, the Canadian Association of Petroleum Producers was critical of the announcement coming out of New York.

"Attempts to stifle Canadian production by restricting financing can have only one effect; countries with lower environmental standards and in many cases lower social, human rights and governance standards will fill the void. We should be supplying Canadian energy to the world," said Tim McMillan, the president and CEO of CAPP.