NYC Puts $280B Pension Funds At Risk Over Climate Action

n a landmark Earth Day release, New York City Comptroller Brad Lander dropped the gauntlet on Wall Street: asset managers handling the city's $280 billion pension portfolios will have to conform to newly established, aggressive Net Zero climate expectations by June 30, 2025—if they wish to retain their mandates. This gamble for the future solidifies the city as a national climate accountability leader, particularly in response to what Lander describes as a "systematic gutting" of federal climate gains during the administration of former President Donald Trump.

The announcement is a significant escalation of Lander's climate finance initiative, which he initiated when he took office in 2022 with a pledge to direct city pension funds—NYCERS (New York City Employees' Retirement System), TRS (Teachers' Retirement System), and BERS (Board of Education Retirement System)—to Net Zero emissions by 2040. But now, with federal support collapsing and environmental rollbacks accelerating under Trump's leadership, Lander is taking action into the city's own hands.

"Under our new standards, the managers of the retirement systems need to make their Net Zero plans stronger in line with their fiduciary responsibility—or we'll look to new asset managers who will," Lander announced. Flanked by 350 NYC and Fridays for Future activists, he used his regular "Protecting New York from Donald Trump" briefing to highlight how federal actions taken recently pose to undermine city climate efforts.

Among the federal rollbacks cited by Lander: the cancellation of $300 million in FEMA flood protection funds under the Building Resilient Infrastructure and Communities (BRIC) program; a halted offshore wind project that would have powered half a million homes; the shutdown of the Low Income Home Energy Assistance Program (LIHEAP), leaving over a million vulnerable New Yorkers exposed to extreme weather; and the declaration that New York’s Climate Superfund Act is unconstitutional, accompanied by the scrubbing of key climate data from federal databases.

Lander cautioned that unless they act boldly on the local front, such setbacks could be calamitous. "As Trump relentlessly dismantles advances on climate even as we're seeing more scorching temperatures and disasters with each passing year, cities like New York must keep going," he said.

The new rules for asset managers are well beyond mere gestures of symbolism. In order to stay in good standing, the managers need to submit comprehensive Net Zero transition plans outlining measurement and reporting of Scope 1, 2, and significant Scope 3 emissions. They also need to show actual-economy decarbonization, as opposed to portfolio greening, and ensure their capital expenditure to be in line with science-based climate targets. In addition, managers need to endorse climate-aligned lobbying and take into account community-level effects of their investment choices. Those who do not comply or opt out altogether will have their contracts bid out, with the Public Procurement Board conducting evaluations.

This initiative places companies such as BlackRock squarely in the crosshairs. Lander condemned the financial behemoth for stepping away from the Net Zero Asset Managers initiative, and for abandoning even token commitments to climate action. "Asset managers such as BlackRock have abandoned even the symbolic modes of climate action," he said, in a biting criticism.

Lander also reissued his demand for legal action against Tesla, citing issues regarding CEO Elon Musk's split attention and political loyalties. He blamed the Adams administration for slowing the process of litigation to prevent disfavoring Musk and Trump. "Mayor Adams and his staff are slow-walking a lawsuit against Tesla to stay in Trump's and Musk's good graces, not doing what is best for the retirees of New York City," he claimed.

The reaction among climate activists has been resoundingly positive. Olivia Leirer, Co-Executive Director at New York Communities for Change, lauded Lander's tough stance. "Comptroller Brad Lander is taking action against Trump by transferring funds from dirty money managers to cleaner managers," she said, calling on other progressive states and cities to take the cue by divesting from fossil fuels and holding asset managers accountable.

With the June 2025 deadline approaching, New York City is delivering a strong and unmistakable message: get in line with climate science and take serious action—or get left behind. Without federal leadership, local governments such as NYC are filling the gap with bold action, transforming the investment landscape and setting the bar for climate responsibility throughout the financial sector.