New York City’s public pension funds have issued a stern warning to asset managers, signalling that those failing to align with the city’s climate targets may be stripped of their mandates. Comptroller Brad Lander, who also serves as custodian and trustee for the city’s five major retirement systems, said on Tuesday that firms must present credible net zero transition plans by 30 June or face losing business.
Lander, who is currently running for mayor, directly criticised asset management giant BlackRock, accusing it of retreating from climate commitments, including its recent departure from the Net Zero Asset Managers initiative. BlackRock currently manages approximately $16.8 billion for the New York City Employees’ Retirement System (Nycers), down from $19 billion last year due to asset sales and market fluctuations.
In contrast, Nycers has joined the UN-convened Net Zero Asset Owner Alliance, highlighting a divergence in climate ambition between the pension fund and some of its asset managers. Lander said managers would be assessed based on their entire investment portfolios and full emissions disclosures, including scope 3 emissions—those arising from third-party business activity in the supply chain.
Should asset managers fail to meet the June deadline, Nycers may put those mandates out to tender, potentially opening the door to competitors with stronger climate credentials. The Teachers’ Retirement System and the Board of Education Retirement System are also expected to support the initiative.
Pete Sikora of New York Communities for Change praised the move, arguing it counters the growing backlash against environmental, social and governance (ESG) investing, which he attributes to conservative forces and fossil fuel interests. “Unfortunately, the intimidation campaign was successful,” Sikora said, citing fund withdrawals from firms like BlackRock in Republican-led states.
Lander has previously attempted to hold financial institutions to account over climate-related issues. New York City remains one of the few major municipalities to have implemented a fossil fuel divestment strategy, which it has defended in court. In 2023, Nycers reached agreements with JPMorgan, Citi, and the Royal Bank of Canada to disclose their clean energy to fossil fuel financing ratios and plans to step up its shareholder activism in upcoming bank meetings.
The latest move comes as political resistance to climate action intensifies nationally, but Lander’s approach reflects a determination to maintain New York City’s leadership on sustainable finance.
