Sometimes State Bureaucrats Do The Right Thing

It’s hard to see it—especially with the myriad examples of incompetence and corruption and just plain stupidity, especially with the New York State Senate making a mockery of the political system with its Cirque du Squabble—but every once in a while, a state-run entity gets it right.

So in honor of the 20th anniversary of Spike Lee’s excellent 1989 film, I’d like to present my inaugural “Do the Right Thing” Award to the New York State Common Retirement Fund for having a conscience. The $110 billion fund plans to divest $86.2 million in investments from nine companies doing business in Sudan and Iran.

The move, announced by New York State Comptroller Thomas P. DiNapoli Tuesday, follows two years of extensive research and evaluation under risk mitigation programs focused on Iran and Sudan, the fund said. The action also freezes an additional $300 million in seven other companies.

“Iran is supporting terrorism,” DiNapoli said in a statement. “It’s trying to become a nuclear power, and its president has made public statements that amount to an incitement to commit genocide by calling for the destruction of Israel. Over the past month, we’ve seen just how brutal this regime can be, even toward its own citizens.

“The genocide in Sudan challenges us as citizens of the world,” he continued. “We can neither be blind to this callous destruction of human life nor silent in its face. At some point we have to ask, can we afford to risk pension fund investments in nations led by these kinds of regimes?”

The fund plans to divest out of $86 million in Gazprom, Inpex, Lukoil, Oil And Natural Gas Corp., OMV, Petroleo Brasileiro, Statoil, 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, Repsol YPF, Royal Dutch Shell, Total SA, ABB Ltd., Alstom and Snam Rete Gas. And it plans to focus on other industries, including telecommunications.

Moreover, New York is not alone; other states have taken or are planning similar actions.

Investing with a conscious is not always easy; institutions and the money managers who work for them have a duty to, while considering risk, provide the best returns possible for their investors. And responsible investing doesn’t necessarily add up to strong returns. But in any case where it is possible, especially the extreme ones (we are talking genocide here) investors should do the right thing.

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