U.S. Pensions Face Risk With $40 Billion in High-Carbon Stocks

The biggest U.S. public pension funds have about 9% of their equity investments in 20 high-carbon emitting companies, despite efforts to reduce exposure to the energy sector.

The largest 10 funds have about $40 billion invested in 20 high-carbon companies, according to a Bloomberg Intelligence reportWednesday. The investments in companies such as Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell Plc could put the funds at several forms of risk, analysts Gaurav Patankar and Kumar Gautam said in the report.

Shares of companies with high carbon emissions may be more volatile than those with lower emissions. A 10-year ...