On Earth Day, Comptroller Stringer Announces NYC Pension Funds Have Launched the City’s First-Ever Search for Investment Managers with Low-Carbon and Sustainable Indexes
April 22, 2017
(New York, NY) — Today, New York City Comptroller Scott M. Stringer announced his office was conducting New York City’s first-ever search on behalf of the New York City Pension Funds to identify index investment managers capable of providing sustainable or low-carbon investment options. As part of a $56 billion manager search, the Comptroller’s Office is specifically seeking index managers that can manage various types of indexes, including those that proactively account for and focus on low-carbon investments and environmental, social, and corporate governance factors.
“Climate change is real, the science is real, and the threat to both our planet and the global economy is real. This isn’t just about doing the right thing by the planet. When we invest in companies that recognize the irrefutable realities of global warming, we’re making smart investment decisions and boosting returns,” New York City Comptroller Scott M. Stringer said. “Incorporating even more sustainable options into our portfolios is a win-win — it prepares our funds for the future while encouraging companies to go green. The entire market needs to act on global warming.”
The Pension Funds already have $3.6 billion invested in clean and renewable energy and energy efficient assets. Further, 24% and 40% of the Pension Funds’ infrastructure and real estate portfolios, respectively, are in environmentally-conscious investments.
In this new, $56 billion search process, managers selected will either receive an immediate investment under a three-year contract or become part of a “pool” of managers that are eligible to compete for future allocations. Selections will be finalized in the coming months.
Including managers with a focus on environmental, social, and governance (ESG) factors and low-carbon investment options as part of this index manager search is just the most recent in a long line of steps the New York City Pension Funds have taken to address the risks associated with climate change. The Pension Funds and Comptroller Stringer have:
- Invested over $3 billion in clean and renewable energy and energy efficient investments, including:
- 24% of the Funds’ Infrastructure investments — which are particularly sensitive to risks associated with climate change — are invested in renewable energy infrastructure including wind, solar, and hydropower.
- 40% of the Funds’ private Real Estate portfolio, which are also impacted by climate change and energy efficiency, are LEED or Energy Star Certified.
- Won proxy access — a groundbreaking new reform, launched out of the Comptroller’s Office in 2014, which gives large long-term shareowners the right to nominate board directors who are climate-competent — at more than three dozen major energy companies. After enacting the reform, ExxonMobil added a climate scientist to their board.
- Commissioned the Pension Funds’ first-ever carbon footprint analysis and climate change investment risk study, which will allow the Trustees to better assess the short- and long-term investment risks associated with climate change and create a responsible plan of action.
- Divested some of the Pension Funds from coal intensive companies.
Comptroller Stringer serves as the investment advisor to, and custodian and a trustee of, the New York City Pension Funds. The New York City Pension Funds are composed of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.
In addition to Comptroller Stringer, the New York City Pension Funds’ trustees are:
New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido , Executive Director, District Council 37, AFSCME; John Samuelsen, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler (Chair); Raymond Orlando, representing the Chairperson of the Panel for Educational Policy and Debra Penny, Thomas Brown and David Kazansky, all of the United Federation of Teachers.
New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner James P. O’Neill (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.
New York City Fire Department Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha; James Slevin, President, Gerard Fitzgerald, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Farina, Captains’ Rep.; Paul Ferro, Chiefs’ Rep., and Jack Kielty, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Thomas Phelan, Marine Engineers Association.
Board of Education Retirement System: Schools Chancellor Carmen Fariña; Mayoral: Isaac Carmignami, T. Elzora Cleveland, Vanessa Leung, Gary Linnen, Lori Podvesker, Stephanie Soto, Benjamin Shuldiner, Miguelina Zorilla-Aristy; Michael Kraft (Manhattan BP), Debra Dillingham (Queens BP), Geneal Chacon (Bronx BP), April Chapman (Brooklyn BP), and Peter Calandrella (Staten Island BP); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.