NYC Comptroller Brad Lander Responds to Congressmembers Jordan & Massie on Responsible Investing Efforts

New York, NY – New York City Comptroller Brad Lander, who serves as investment advisor, custodian and a trustee to the City’s five public pension funds, today responded to an inquiry from U.S. House Committee of the Judiciary Chair Jim Jordan, and Subcommittee on the Administrative State, Regulatory Reform, and Antitrust Chair Thomas Massie.

The Congressmembers sent a letter to more than 130 members of the Climate Action 100+ (“an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take appropriate action on climate change in order to mitigate financial risk and to maximize the long-term value of assets”). The Congressmembers asked for information pertaining to engagement and strategy with respect to Climate Action 100+ focus companies.

In response, Comptroller Lander emphasized the systemic, well-documented and material risks posed by climate change, which risks long-term shareholder value.

“Fiduciaries have a responsibility to maximize risk-adjusted returns for beneficiaries over the duration of their obligations, which means taking into account the potential impact that systemic risks such as climate change have on investments over the long term,” said Comptroller Lander. “A pension is a promise — and as the investment advisor to one of the nation’s largest pension systems, I’m proud that our investment strategy achieved a robust 10% combined net return for our retirees over the past year, far outpacing our actuarial target of 7%, after three of our funds divested from fossil fuel reserve owners, implemented a comprehensive engagement strategy to achieve net-zero emissions by 2040, and substantially scaled up investments in climate solutions. We’re committed to paying attention to all risk factors that could impact our bottom line.”

The Office of the New York City Comptroller, as the investment advisor for the City’s public pension funds, seeks to address the material risks that could jeopardize long-term value. Three of the New York City public pension funds have undertaken efforts to mitigate the systemic and company-specific risks that climate change poses to their portfolios. Asset owners, asset managers, and portfolio companies have the responsibility to address risks associated with the climate transition. Decarbonization is critical to protect investment capital and retirement security in the decades to come, just as a transition to a low-carbon economy presents significant investment opportunities in renewable energy, energy efficiency, and other climate solutions that will create good jobs and generate strong returns for investors.

The efforts of the Comptroller’s Office to deliver strong pension returns while ensuring that clear risks are accounted for have led to positive growth for the three impacted New York City public pension funds (New York City Employees’ Retirement System, Teachers’ Retirement System of the City of New York, and the New York City Board of Education Retirement System).

These three funds have divested from fossil fuel reserve owners, implemented a comprehensive engagement strategy to prudently address climate risks and achieve net-zero emissions by 2040, and substantially scaled up investments in climate solutions. Earlier this year, engagement by Comptroller’s Office on behalf of these funds secured commitments from J.P. Morgan Chase, Citibank, and Royal Bank of Canada to disclose the ratio of fossil fuel financing to clean energy financing, a critical step forward in transparency around energy financing and its associated risks.

This month, the Office of the New York City Comptroller announced a robust 10% investment return across all five pension funds for the fiscal year ending June 30, 2024, outperforming many peer funds, far outpacing the 7% actuarial rate of return established by the New York State Legislature, and delivering $1.81 billion in savings for New York City.

Click here to see the letter from Congressmembers Jordan and Massie, and here to see Comptroller Lander’s response.

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