Dive Brief:
- The New York City Employees Retirement System tabled a recommendation last week from outgoing Comptroller Brad Lander to drop BlackRock and Fidelity Investments as asset managers over what he called their unsatisfactory decarbonization strategies. A vote on the issue was pushed to January.
- Lander proposed that the pension’s trustees vote to drop the pair of asset managers at NYCERS’ monthly investment meeting on Dec. 17. Lander also changed his view on removing PanAgora Asset Management, after the manager submitted “an enhanced net-zero plan.”
- Lander, whose term ends Dec. 31, had recommended the city’s pensions move on from all three asset managers in November. As of August, BlackRock managed $42.3 billion in assets for the city’s pensions — including a public equity portfolio — while Fidelity managed $384 million for one of the city’s pensions.
Dive Insight:
Lander said last week that his recommendation that the funds quit BlackRock and Fidelity “followed a rigorous evaluation” which found the firms were misaligned with the pension fund’s net-zero plan. In April, Lander called for all asset managers for the city’s pensions to submit their decarbonization strategies and efforts to incorporate climate-related risks into their investment decisions.
There are 49 asset managers for the city’s pension funds, which oversee investments for more than 750,000 city employees.
Lander’s November recommendations were issued in an update on the Net-Zero Implementation Plan for NYCERS, the city’s Teachers’ Retirement System and the Board of Education Retirement System. In the report, the outgoing comptroller expressed concerns with BlackRock’s “restrictive approach” to engaging with public companies and Fidelity’s practice of voluntarily applying the Securities and Exchange Commission’s engagement advice to U.S. and non-U.S. companies.
“As BlackRock’s Larry Fink said in 2020, ‘climate risk is financial risk.’ Unfortunately, BlackRock in 2025 is failing to act like it,” Lander’s statement said. “While I am disappointed in the decision of NYCERS’ trustees to table my recommendation to rebid BlackRock’s mandate today, I hope the trustees will vote to adopt it in the new year.”
Lander said issuing a search notice for BlackRock’s public equity mandates would give the pension system the ability to “re-evaluate appropriate managers for these assets, who would generate risk-adjusted market returns, price competitively, and align with the fund’s investment policies, including on climate transition.”
Following Lander’s November recommendations, BlackRock accused the outgoing city comptroller of politicizing pension funds and “undermin[ing] the retirement security” of New York City’s workers.
“Should they take up [Lander’s] recommendation, we look forward to demonstrating the breadth and depth of our capabilities and the tremendous value we deliver to NYC [Bureau of Asset Management] and 750,000 dedicated public servants,” BlackRock said in November.
PanAgora actively manages a $358 million portfolio of U.S. small cap equities for NYCERS and TRS. Following the November recommendation that the pensions remove PanAgora as a manager, Lander said last week that the asset manager submitted an updated decarbonization plan “reflective of a serious commitment to climate action.”
