Divestment case studies

Globally, 1,500 institutions have made public commitments to divest from fossil fuels. According to Stand.Earth, the value of institutions divesting across the world amounts to $39.88 trillion.

There is no one blueprint for an effective fossil fuel divestment policy, but notably commendable commitments have included a clear, time-bound commitment to divest from fossil fuels with regular reporting and accountability structures.

The strongest commitments also place divestment from poorly behaving companies within a broader framework that includes investment in sustainable technologies and infrastructure, consideration of climate impacts across portfolios, and broader investor and public policy efforts to address the climate crisis.

The following case studies give a picture of how institutions of different scales may seek to implement divestment within their own contexts. We hope these will be a useful resource for campaigners seeking to convince their own target institutions that divestment is possible.

Pension funds

The New York State Common Retirement Fund (NYSCRF) is a US $268 billion fund providing pensions to over one million public workers.

In December 2020, the fund announced a comprehensive new policy to address the climate crisis likely to result in divestment from fossil fuel companies, with additional measures to increase investments in climate solutions to US $20 billion.

State comptroller, Thomas P. DiNapoli said “New York State’s pension fund is at the leading edge of investors addressing climate risk, because investing for the low-carbon future is essential to protect the fund’s long-term value.”

The fund is using in-house staff and consultants, including Carbon Tracker, to assess the performance, outlook and transition readiness of its fossil fuel holdings. Reviews of all fossil fuel holdings including any resulting divestment must be completed by December 2024.

Activities which will flag companies for review include fossil fuel production, oil and gas servicing, and fossil fuel transportation and storage, such as pipeline operators and Liquified Natural Gas terminals.

Assessments are being carried out in tranches according to Global Industry Classification Standard sub-sectors, with the outcomes – i.e. which companies have been earmarked for divestment – published on completion.

The first tranche was completed in June 2020 and saw divestment of 22 thermal coal companies that exceeded a 10% revenue threshold and failed to evidence a rapid exit from fossil fuels. Tar sands were reviewed in the second tranche, with seven companies divested in April 2021.

In August 2021, the fund began a review of its significant investments (US $640 million) in shale oil and gas companies while announcing divestment from 5 further coal companies. In 2022 the Fund will then begin to review other oil and gas holdings; oil and gas equipment and services; and oil and gas storage and transportation.

New York State hasn’t published the criteria it is using to carry out this assessment, but according to US organisation Stand.Earth who have been speaking to the Comptroller’s office about the ongoing process, the following are taken into account:

  • Capital expenditure on expansion projects
  • Investments in non-fossil fuels
  • Diversification
  • Reporting
  • Responsiveness to their requests for more information
  • Carbon disclosure*
  • Climate-related goals of the companies including the strength and detail of any plans to get to zero emissions

Companies which are not earmarked for divestment are subject to annual reassessment with progress reports published annually. The first of these was published in April 2021.

New York City’s pension funds, which are held separately from the State, are worth US $190 billion. It announced its intention to divest from fossil fuels in January 2018, with the Mayor announcing in January 2021 that US $4 billion in fossil fuel holdings would mostly be sold by the end of the year. The City’s pensions are also increasing investment in climate solutions to US $6 billion.

* Specifically company disclosures promoted by the organisation CDP: https://www.cdp.net/en/scores


The London Borough of Islington Pension Fund was valued at £1.4 billion in 2021 with 21,000 members.* 46% of the Fund is invested in public equities and 25% in property.

Islington’s fund uses the term ‘decarbonisation’ to describe the process of removing the exposure of its investment portfolio to fossil fuel reserves and production, as well as green-house gas intensive activities. The Fund is also keen to exploit opportunities presented by the transition to a low-carbon economy. It has implemented a number of relevant measures in recent years:

  • In 2017 the Fund moved half of its passive equities to the low carbon tracker funds with the other half invested in-house tracking the FTSE UK Low Carbon Optimised Index.
  • In 2018 the Pension Fund Committee committed to divestment of all fossil fuels in the Fund by 2022, to be enacted by divesting its own holdings and switching to fossil-free passive funds.
  • £172 million initially allocated to sustainable infrastructure. The target was increased to 20% in 2021.
  • Ongoing effort to fully decarbonise the portfolio as a “next step” after divestment from fossil fuels. Targets are set for 2026, 2030 and 2050.
  • Comprehensive carbon foot-printing and Environmental and Social Governance (ESG) review conducted of the whole portfolio annually, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures.
  • Appointment of a fund manager with ESG specialism, a low-carbon infrastructure manager, and advice sought from Mercers and others.
  • Councillors and officers attend specialist climate transition, objectives, framework and implication training.

Minimum standards for companies to determine if divestment is required are as follows:

  • Assessment of absolute potential emissions in CO2 equivalent, a reserves-based measure that focuses on emissions that could be generated if the proven and probable fossil fuel reserves owned by the companies in the portfolio were burned.
  • Assessment of the carbon intensity of companies as measured by Weighted Average Carbon Intensity, an indicator of current climate-related risks facilitating comparison across asset classes and industry sectors.

Since 2016, Islington’s policies have resulted in a 55% reduction in fossil fuel exposure, 69% reduction in absolute potential emissions and a 33% reduction in current carbon intensity.

On financial performance, Islington is in the top quartile of performance in the local government scheme, and in the three years since its divestment policy has taken effect, has outperformed the scheme average.

* Specifically company disclosures promoted by the organisation CDP: https://www.cdp.net/en/scores