Following SCOTUS CakeShop Ruling, Comptroller Stringer Announces New Non-Discrimination Evaluation for Investment Managers Seeking To Do Business with NYC Pension Funds

(New York, NY) — Comptroller Scott Stringer announced today the Bureau of Asset Management (BAM) will now inquire about prospective fund managers’ commitment to maintaining non-discrimination policies and best practices as part of recommending them to the City’s pension boards for approval. The announcement comes after the Supreme Court ruled in favor of a Colorado baker who refused to create a cake to celebrate the marriage of a same-sex couple based on a religious objection.

BAM serves as the investment advisor to all five New York City pension funds. In this role, BAM provides investment advice, implements Board decisions and reports on investment performance. The portfolios of the five Systems are managed primarily by external investment managers, who are issued an initial due diligence questionnaire that evaluates investment strategy, organizational structure as well as environmental, social and governance policies and procedures. BAM’s investment strategy teams then review all of the managers’ responses as a component of the evaluation process.

As of today, the questionnaire will ask fund managers if the companies they invest in maintain policies to comply with all applicable non-discrimination laws and if they have internal non-discrimination policies and best practices covering all legally protected groups, including race, gender, sexual orientation, age, religion, veteran status and disability.

“Although the Supreme Court’s decision signals that our fight for LGBTQ+ rights is far from over, it does not change how we do business here in New York,” Comptroller Stringer said. “Discrimination of any kind is a threat to our communities and potentially creates risks for our fund investments. Today, we are sending a clear message that discrimination has no place in New York, and is also bad for business, regardless of what they think in Washington.”

The Comptroller has instituted a number of policies to further diversity within the Bureau of Asset Management, including:

• Becoming the first public pension system to ask every investment manager to disclose the diversity and compensation levels of their leadership and investment teams to be considered as a part of the Comptroller’s Office’s due diligence process;
• Explicitly defining board diversity to include the LGBTQ+ community in corporate governance policies;
• Hiring the first ever Director of Diversity and Inclusion in the Bureau of Asset Management;
• Launching the annual Diverse Practitioner Awards to recognize investment management firms that have committed to diversity among their staffs, boards and in their policies and practices;
• Establishing a Diversity Working Group in BAM to pinpoint ways to involve diverse investment staff, asset managers and suppliers in the City’s Pension Funds;
• Increasing the pension systems’ assets invested with minority and women-owned investment managers by 30 percent since 2014; and
• Creating the Boardroom Accountability Project, a groundbreaking campaign to give shareowners the right to nominate directors at U.S. companies using the corporate ballot, known as “proxy access.” To ensure that companies are truly managed for the long-term, boards must be composed of diverse, independent and accountable directors. The ability to nominate directors is a fundamental shareowner right and the starting point for this transformation. In 2014 when we started, just 6 companies had this policy – today, in part due to our efforts, more than 500 companies do, including over 65 percent of the S&P 500.

To read more about the Boardroom Accountability Project, click here

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