NYC Comptroller Lander & Pension Trustees Celebrate Dismissal of Lawsuit Challenging Fossil Fuel Divestment by New York City Pension Funds
Lawsuit tossed out due to lack of standing
Lander: “This is a big win for common-sense responsible investing, New York City’s municipal workers and retirees, and for the future of the City and the planet”
New York, NY – On Tuesday, July 2, the New York County Supreme Court dismissed Wong et al v. NYCERS, a case that challenged the decision by three of New York City’s pension funds (the New York City Teachers’ Retirement System, New York City Employees’ Retirement System, and New York City Board of Education Retirement System, collectively, the three Systems) to divest from publicly traded fossil fuel reserve owners.
“This Court’s decision is a big win for common-sense responsible investing, for New York City’s municipal workers and retirees, and for the future of our City and our planet,” said Comptroller Brad Lander, a trustee to, and investment adviser and custodian, for the three Systems. “Our pension funds are implementing ambitious and well-researched plans to address the material risks of climate change — including divesting from fossil fuels, investing in renewable energy and climate solutions, and actively engaging with our asset managers and portfolio companies to reduce their financed emissions. I’m delighted that the Court dismissed this attempt by anti-ESG forces to undermine responsible investing and prevent the transition to a low-carbon economy.”
The Court affirmed the position taken by the three Systems in their motion to dismiss, where they argued that the plaintiffs lacked standing because they had not suffered any injury. The Court agreed, noting that the plaintiffs had no injury because the three Systems are “defined benefit retirement plans” that entitle plaintiffs “to a fixed benefit each month.” Accordingly, the plaintiffs “have not, and will not, suffer any monetary losses based upon [the three Systems’] investment decisions.”
In 2021, recognizing the threat climate change-related risks pose to their portfolios, the three Systems voted to divest from publicly traded fossil fuel reserve owners. This followed a deliberative and extensive fiduciary process that assessed portfolio exposure to fossil fuel stranded asset risk, industry decline, and other financial risks stemming from climate change. Even the fossil fuel industry has now admitted that climate change-related risks are material financial risks. In Securities and Exchange Commission filings, they acknowledge the potential impact of climate change to their long-term financial performance and profitability.
The three Systems completed their divestment from fossil fuel reserve owners in their public equities under Lander’s leadership in 2022. They subsequently adopted net zero implementation plans, which provide a path for decarbonization across the three Systems’ portfolios and the global economy.
The New York City Law Department and Groom Law Group represented the three Systems in the litigation.
“This lawsuit was just hot air—the last thing we need in the fight against climate change,” said Bryan Berge, representative of Mayor Eric Adams, chair of the Board of the Trustees of the New York City Employees’ Retirement Systems, and trustee of the New York City Teachers’ Retirement System. “This decision allows NYCERS and TRS to remain focused on the real work of providing secure retirements to their members.”
“Being a trustee is not an easy job, but as fiduciaries we use prudence and integrity when making the decisions that we make. I am excited to hear that the New York State Supreme Court saw it that way as well,” said Donald Nesbit, Executive VP Local 372 and DC37 VP/ Political Action Chair.
In addition to Comptroller Lander, the trustees of the aforementioned systems are as follows:
New York City Teachers’ Retirement System (TRS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; Chancellor’s Representative, Gregory Faulkner, New York City Department of Education Panel for Educational Policy; and Thomas Brown (Chair), Victoria Lee, and Christina McGrath, all of the United Federation of Teachers.
New York City Employees’ Retirement System (NYCERS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Public Advocate Jumaane Williams; Borough Presidents: Mark Levine (Manhattan), Antonio Reynoso (Brooklyn), Donovan Richards Jr. (Queens), Vito Fossella (Staten Island), and Vanessa L. Gibson (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; Richard Davis, President Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
New York City Board of Education Retirement System (BERS): Schools Chancellor David C. Banks, Represented by Karine Apollon; Adriana Alecia; Shirley Aubin; Aaron Bogad; Lilly Chan; Marjorie Dienstag; Gregory Faulkner; Anita Garcia; Anthony Giordano; Naveed Hasan; Jessamyn Lee; Sharon Odwin; Alan Ong; Phoebe Sade-Arnold; Maisha Sapp; Thomas Sheppard; Manny Tavarez; Venus Sze-Tsang; and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.
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