New York State’s pension fund would have an additional $5.3bn to give to its retired employees if it had divested from fossil fuel companies and put that money into clean energy, according to a new report.

The analysis, compiled by research firm Corporate Knights, assessed the fund’s top 100 domestic and international equity holdings, and calculated how much it would have earned over the past three years if it had got rid of its investments in coal, oil and gas companies.

The New York State Common Retirement Fund is the third largest pension fund in the country, behind California’s CalPERS and CalSTRS, with $184.5bn held in trust for retirement benefits. According to the report, released this week, a move away from fossil fuels would have made each of the fund’s 1.1 million members more than $4,500 richer, and helped the state cover nearly 12% of the costs following Hurricane Sandy in 2012.

Toby Heaps, CEO and co-founder of Corporate Knights, said the numbers show that divestment makes prudent financial sense.

“Divestment is good for reducing portfolio risk,” he said. “It’s also a powerful way of sending a message about the expectations investors have of companies and governments to be rational about accelerating the energy transition in a timely manner so that we avoid scenarios of climate chaos, which would make it difficult for anybody to earn returns.”

“Government policy, which we think will only strengthen, is beginning to capture the societal costs of burning fossil fuels, enhancing the competitive position of investments in energy efficiency and renewables,” said Stu Dalheim, vice president of shareholder advocacy for Calvert Investments, which invests in socially and environmentally responsible businesses. “The Paris Agreement sent a clear and important signal to the market that we are moving toward a low carbon energy system.”

The report comes as New York State Senator Liz Krueger is pushing to pass a bill that would require the state’s pension fund to divest from fossil fuels. The Fossil Fuel Divestment Act would require the fund to sell off its stocks in the top 200 largest fossil fuel companies by 2020.

“By divesting from fossil fuels, the [Common Retirement Fund] will send a message that it is unacceptable for any institution to profit from activities that threaten the future of society, and will begin the process of delegitimizing a business model that, while financially profitable in the short run, is socially and morally bankrupt,” wrote Krueger in her announcement of the bill.

Full article: New York pension fund could have made billions by divesting from fossil fuels – report