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The enormous New York State Common Retirement Fund plans to divest $86.2 million in investments from nine companies doing business in Sudan and Iran.
New York State Comptroller Thomas P. DiNapoli also announced Tuesday the $110 billion fund would freeze an additional $300 million in seven other companies.
It is the first time the fund has divested investments and not tried to get the companies involved to change their policies. The decision comes after two years of reviewing these companies, the potential risk of the investments and, in some cases, humanitarian efforts in these countries.
"We don't expect our investments to benefit regimes that support genocide and terrorism," said DiNapoli.
The fund plans to divest out of $86 million in Gazprom (OGZPY), Inpex (1605.TO), Lukoil (LUKOY), Oil And Natural Gas Corp (500312.BY), OMV (OMVKY), Petroleo Brasilia (PBR), Statoil (STO), Wartsila OYJ and Sinopec Corp.
DiNapoli said the firms were chosen because "they failed to respond or we were not satisfied with their responses" when asked to provide information to the fund on the investments and their risks..
The fund also plans to monitor and prohibit further investment in ENI (E), Repsol YPF (REP), Royal Dutch Shell PLC (RDSA), Total SA (TOT), ABB Ltd. (ABB), Alstom (ALO.FR) and Snam Rete Gas (SNMRY). Additionally, it plans to focus on other industries including telecommunications.
The announcement comes two years after DiNapoli announced that the pension would be reviewing investments in Iran and Sudan. It initially encouraged companies to withdraw from Sudan or to begin "taking substantial action aimed at providing carefully constructed humanitarian aid and relief."
Other states are taking or planning similar actions. Florida, which has had a state divestment law since 2007, has been one of the most aggressive. The Florida Retirement System's pension had divested $1.153 billion as of mid-April, said Mike McCauley, senior officer for investment and governance for the Florida State Board of Administration, which manages the pension.
Fourteen states have or plan to implement divestment legislation, said Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations.
-By Jillian Mincer, Dow Jones Newswires; 212-416-2239
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