Sierra Club Applauds New York City Goal to Reach Net-Zero Emissions in Investment Portfolios by 2040

NEW YORK — The Sierra Club applauds New York City Comptroller Brad Lander and the trustees of the New York City Employees’ Retirement System (NYCERS) for today’s announcement that the board has approved an implementation plan to reach their goal of net-zero emissions in their investment portfolio by 2040. 

The Net Zero Implementation Plan includes four strategies that the pension fund will employ to achieve net zero: 

• Disclose Scopes 1, 2, and 3 emissions and set interim targets, including measurable goals and benchmarks, across all investments and operations.
• Engage portfolio companies to be net zero-aligned by conducting robust shareholder engagement and strengthening partnerships.
• Invest in climate change solutions, such as renewable energy, energy efficiency, pollution prevention, and low-carbon buildings.
• Divest to reduce risk by asking all private markets managers to exclude upstream fossil fuel investments, and by assessing exclusion of any manager or company whose core business undermines climate goals, consistent with fiduciary duty.

In response to the announcement, Ben Jealous, Sierra Club executive director, issued the following statement:

“We welcome the leadership of Comptroller Lander and New York City's public pension funds. By considering and mitigating the real risks of climate change, this plan protects the retirements of hardworking Americans for decades to come. New York City has once again raised the bar for smart, transparent investment policies that put retirees first. As the climate crisis continues, it poses real risks to people's savings and the entire economy. We need more state and local financial officers to manage and mitigate the systemic risk of climate change to their investments and prevent corporate polluters and climate-denying politicians from putting their fossil-fuel agenda above the stability and prosperity of our futures."

Background

New York City’s public pension funds are national leaders in mitigating climate risk in investment portfolios. In 2015, three New York City Retirement Systems (NYCRS) divested from thermal coal. From 2017 through 2022, the three funds conducted a comprehensive climate risk assessment, divested from fossil fuel reserve owners, and doubled investments in climate solutions. In October 2021, the three funds committed to reach net zero by 2040, and set a robust goal of investing $37 billion in investments by 2035. Trustees directed the Comptroller, who serves as investment adviser, custodian, and a trustee of the funds, to develop an implementation plan to reach that goal across portfolios.

In developing the plan, the Comptroller’s Office consulted a wide range of stakeholders, including the United Nations High-Level Expert Group on the Net Zero Emissions Commitments of Non-State Actors, the Paris-Aligned Investment Initiative, and the Net Zero Asset Owners Alliance. Given the prevalence of greenwashing by corporations and investors who have announced net zero goals but shown no intention of actually reaching them, and rollbacks in the face of right-wing pushback against responsible investing, the Comptroller prioritized the adoption of a measurable and transparent plan that could serve as a model for other investors. The Comptroller’s office will work with other “high-ambition” investors to align on disclosure, asset manager due-diligence standards, and shareholder engagement.        

“The Net Zero Implementation Plan adopted by trustees today is a tangible, measurable roadmap toward decarbonization across our investment portfolio and the global economy,” said New York City Comptroller Brad Lander. “This is a plan to prudently address climate risks and maximize opportunities to benefit New York City pensioners and beneficiaries, consistent with our fiduciary duty. This ‘high ambition’ plan is also a call for partnership with other pension funds, asset managers, financial firms, and portfolio companies. The climate crisis cannot be effectively addressed in silos.”

See the full press release from the New York City Comptroller’s Office here.