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Two of the city’s five pension systems announced plans to divest from fossil fuel investments by 2040 and to also pressure private market managers to set goals to combat climate change, the city comptroller’s office announced April 5.
The Teachers Retirement System, which has a $91.5 billion investment portfolio, approved a so-called net-zero implementation plan on Tuesday. The $78 billion New York City Employees Retirement System voted to adopt a similar program in February.
The pension systems will focus on investing in climate change solutions such as renewable energy and low-carbon buildings and engaging portfolio companies to align with the city's goals of reaching net-zero emissions. NYCERs aims to invest $17 billion in climate solutions by 2035. By that same year, TRS seeks to invest $19 billion. The funds will also set interim targets to reduce emissions by 32 percent by 2025 and by 59 percent by 2030.
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“Climate change poses systemic and material risks not just to the planet and everyone on it, but also to the global economy, to the budget and finances of the city of New York, and to the investment portfolios of the New York City retirement systems," Comptroller Brad Lander said during a press conference. "How investors, very much including the New York City pension funds, finance climate transitions now will substantially determine how many lives and how many dollars we are able to protect in the decades to come."
Additionally, the funds will ask private market managers to exclude the pensions from upstream fossil fuel investments. If managers refuse to set goals to reduce emissions, the pension systems will consider excluding the companies from their portfolios, according to the comptroller. Combined, NYCERS and TRS have more than $15.7 billion invested in private equity.
“We hope this plan will serve as a model that other fiduciaries will pay attention to and join us in,” Lander said.
Ben Jealous, the executive director of the nonprofit environmental advocate group Sierra Club, praised the comptroller and the pension systems’ boards for "recognizing the real risks of climate change but also recognizing the real opportunity in this green economy."
"While a lot of states want to bury their heads in the sand ... this city, which has frankly greater pension investments than many states, is doing exactly the right thing," he said during the press conference.
Trustees for a third pension fund, the Board of Education Retirement System, will vote on a similar implementation plan later this month, according to a spokesperson for the comptroller’s office. The remaining funds — the New York City Fire Pension Fund and the New York City Police Pension Fund — are not participating in the net-zero implementation plans but aim to invest in climate solutions, according to the financial news outlet Pensions & Investments.
“By adopting these plans, NYCERS and TRS are showing what responsible investment looks like in the era of climate change,” Bryan Berge, who represents the mayor as chair of NYCERS’ board of trustees, said in a statement.
Henry Garrido, executive director for District Council 37 and a NYCERS trustee, said the union “strongly supports” the pension system’s plan.
“I am proud to stand with my fellow trustees and Comptroller Lander to commit to take actionable, science-based steps to address the global climate crisis. Our vote today signals that NYCERS — and labor — will play a leading role, working with other stakeholders, to protect millions of lives, and the retirement livelihoods of our members,” he said.
The implementation plans build upon previous actions taken by the city pension systems to combat climate change, including divesting from thermal coal in 2015. Lander called for partnership with other pension funds, financial firms and portfolio companies. “The climate crisis cannot be effectively addressed in silos,” he said in a statement.
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MichaelDeCandia159
I did solar. Way to expensive, you will go broke trying to go green and upkeep the system. Does it have a place , yes. But it will never be mainstream. I have equipment not being used, why, lead acid batteries $4000 to replace, lithium $10000, not worth the effort or expense. Would never advise anyone to do it.
Wednesday, April 12, 2023 Report this
FFDAMH
Lovely to see politicians look to score points with their activist supporters by putting my pension assets and future livelihood in to less than optimal investments or just plain dicey fashionable "progressive" sounding adventures.
Wednesday, April 12, 2023 Report this
I believe this is the way of the future and those responsible must also push to make it very affordable to change to green energy. We need major tax breaks for homeowners to switchover for a long period of time. We must have a clean environment water, air and land should not be sacrifice while we know and have the technology to improve our way of life. The system appears to be slow to have stations available to charge electric cars that needs to change to help make this work all over the country. Solar panels are ridiculous to put such large panels on the roof and pay extra all around even down the line if you have to do repairs on the roof. I think we have the technology to make them very small like a size of a regular book to get the same effects. Those big monstrosities will go away like the Satellites for cable or the VCR etc…Green is the way but the public must get the best for their investment at a very low cost with many other incentives to get it all to work. The Pension support on this may help push this agenda faster than the present process of delays.
Thursday, April 13, 2023 Report this