Climate change poses systemic and material risks to the global economy, to the City of New York, and to the investment portfolios of the New York City Retirement Systems. Rising tides and temperatures are already leading to lives lost and billions of dollars in damages and economic disruption. How investors finance climate transition now will substantially determine how many lives and dollars we protect in the decades to come. A just transition to a low-carbon economy also presents significant investment opportunities in renewable energy, energy efficiency, and other climate solutions.
New York City pension funds have recognized a fiduciary duty to mitigate the systemic and company-specific risks that climate change poses to our portfolio. As one of the country’s largest institutional investors, we are committed to taking ambitious steps to achieve net zero emissions by 2040. We are working to reduce portfolio emissions, increase climate solutions investments, and engage with our asset managers and portfolio companies to align their businesses with climate goals that will prudently address climate risks and maximize opportunities to benefit current and future NYC pensioners.
Net Zero by 2040
New York City is among the first cities in the nation to commit to achieving net zero greenhouse gas emissions in its public pension funds by 2040. In 2021, three of the NYC retirement systems (NYCERS, TRS, and BERS) voted to set the goal of achieving net zero emissions by 2040 and directed the Comptroller, who serves as investment adviser, custodian, and trustee of the funds, to develop a plan to reach that goal across their portfolios. NYC’s Net Zero Implementation Plan is a roadmap toward decarbonization across NYC’s portfolios and the global economy.
We cannot manage what we don’t measure. We will set measurable goals and benchmarks across all investments and operations, including specific interim emissions reduction targets by asset class, and disclosure of Scopes 1, 2, and 3 emissions.
View total emissions by system on the NYC Climate Dashboard.
The Comptroller’s Office will publish annual reports of progress on the Net Zero Implementation Plan. Annual reports will include status of interim emissions reductions, carbon footprint analysis, climate change solution investments, asset manager alignment, and corporate engagement. The NYC Climate Dashboard includes indicators demonstrating NYC’s net zero progress to provide transparency and accountability for the public.
Disclosure of greenhouse gas emissions and climate risk is the first step to setting interim targets for change. We strongly support the Securities and Exchange Commission’s (SEC) proposed rule changes to require publicly traded companies to include climate-related disclosures in their financial reports. The proposed rule will provide NYCRS and other shareholders with necessary data to assess a company’s climate-related financial risk and encourage companies to evaluate the threats climate change poses to their fiscal health and sustainability.
Over the last three years, we have accelerated our commitment to a sustainable economy by engaging with more than 100 companies on climate change. This proactive approach has yielded significant results: by the end of fiscal year 2025, nearly 30% of the systems’ financed emissions will be covered by validated targets. This achievement includes companies with targets or formal commitments validated by the Science-Based Targets Initiative (SBTi) and the Global Steel Climate Council (GSCC). Beyond broad portfolio engagement, we are driving systemic change by targeting high-priority sectors, such as utilities, hyperscalers, and data centers, and working with major banks to improve the global energy supply ratio.
To ensure rigorous oversight, we have evolved our monitoring frameworks to better track net zero alignment across our listed equity and corporate fixed income portfolios. In 2025, we successfully implemented the NZIF 2.0 assessment, developed by the Paris Aligned Investment Initiative (PAII). This standard-setting approach is mirrored by our asset managers; all public markets managers for NYCERS, TRS, and BERS have now submitted comprehensive plans to align with our net zero goals. A substantial majority of the systems’ public markets managers have adopted net zero goals and/or quantified engagement or portfolio targets that apply to the systems’ investments. Furthermore, a substantial majority of these managers have created new or enhanced existing policies and practices to support the decarbonization of their portfolio companies and assets as a result of the systems’ net zero expectations.
Investing in the next generation of sustainable and resilient technologies is an opportunity both to do well for our beneficiaries and do good for the planet. New York City pension funds have set concrete goals for increasing investments in companies that derive a majority of their revenue from climate mitigation, adaptation, and resilience activities, such as renewable energy, energy efficiency, pollution prevention, and low-carbon buildings. We have set a goal of increasing investments in climate solutions to $50 billion by 2035 for all five NYC pension systems.
- View our progress towards our climate solutions investment goals on the NYC Climate Dashboard.
The International Energy Agency has been clear that keeping fossil fuels in the ground is an essential piece of the global effort to mitigate the worst effects of climate catastrophe.
In 2018, New York City Employees’ Retirement System (NYCERS), Board of Education Retirement System (BERS), and the Teachers’ Retirement System (TRS) announced their intention to divest from fossil fuel reserve owners and retained independent investment consultants who conducted investment analyses showing the risks posed by fossil fuel companies. Together, NYCERS, TRS, and BERS have completed the divestment of nearly $4 billion in public securities, one of the largest such actions in the world.
As part of the Net Zero Implementation Plan, NYCERS and TRS are asking their private markets managers to exclude prospective upstream fossil fuel investments.
Because we need broad alignment to achieve decarbonization of the real economy, rather than just our portfolio, the Net Zero Implementation Plan is focused on engaging companies and the financial community to achieve our goals. However, if companies or managers demonstrate implacable opposition to taking substantive steps to reduce their GHG emissions consistent with the goal of limiting global warming to 1.5˚ C, then the Bureau of Asset Management may recommend divestment to the trustee boards. Any divestment decision would be up to the boards based on their established policies and criteria, consistent with their fiduciary duties.
- View the list of companies that NYC divested from and more information on the NYC Climate Dashboard.
We Can’t Do It Alone
Every investor is exposed to climate risk, but no single investor can protect themselves from it. That’s why investors must take action together. With aligned action, we can limit global temperature rise, saving lives and investment value. Without aligned action, we will likely burn up millions of lives and trillions of dollars.
Unfortunately, too few investors are acting with the clear and timely recognition that climate risk is financial risk. Amidst partisan attacks on efforts to take environmental, social, and governance (ESG) risks into account, some investors are pulling back on their commitments. Others never made tangible commitments in the first place.
NYC pension funds are committed to joining with other “high ambition” investors to set standards, share data, and align action, along the model called for by the United Nations High Level Experts Group on Net Zero Emissions Commitments of Non-State Entities. We believe that serious net zero plans must include:
- Measurable goals, benchmarks, and disclosure across all investments and operations
- Disclosure and targets for Scopes 1, 2 & 3 emissions
- Halt new investments in fossil fuel supply projects now, consistent with IEA guidance
- Partnership with other investors for aligned action in the real economy