TL;DR
New York City pension systems are searching for new asset managers, emphasizing climate risk management and responsible stewardship. The Sierra Club welcomes this move, urging strict adherence to climate standards in asset manager selection.
New York City’s pension systems have launched a search for new asset managers, focusing on firms’ climate risk management and stewardship practices, as existing contracts are set to expire by the end of 2026. This move aligns with the city’s broader efforts to enforce responsible investment standards and address systemic financial risks posed by climate change.
In a statement, NYC Comptroller Mark Levine and trustees of the city’s five public pension funds announced they are reviewing major mandates, including those currently managed by BlackRock and State Street, with an emphasis on climate and ESG factors. The search aims to select managers who demonstrate credible climate-risk management, consistent with the pension funds’ net-zero by 2040 commitments.
Three of the pension systems — NYCERS, TRS, and BERS — have adopted climate action plans and set expectations for their asset managers’ climate strategies. Recent reports indicate most managers are aligned with these standards; however, BlackRock was assessed as insufficiently aligned across all three systems. The city’s pension funds hold over $127 billion in public equity investments, predominantly in passive index products.
Ben Cushing, Director of the Sierra Club’s Sustainable Finance Campaign, responded positively, emphasizing that the search provides an opportunity to enforce climate standards and ensure asset managers meet fiduciary responsibilities. He stated that firms must show credible, transparent plans to retain or secure mandates, or risk losing business.
Impact of NYC Pension Asset Manager Selection on Climate Standards
This development signals a significant shift in how public pension funds incorporate climate risk into their investment decisions. By prioritizing managers with credible climate strategies, NYC is setting a precedent that could influence other large pension systems nationwide. The move underscores the growing importance of responsible stewardship and climate accountability in managing public funds, with potential implications for global financial markets and corporate practices.
Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Background on NYC Pension Climate Commitments and Asset Manager Oversight
Since April 2025, NYC’s pension systems have established standards requiring asset managers to submit net-zero plans, with warnings that non-compliance could result in losing mandates. In late 2025, former Comptroller Brad Lander recommended re-evaluating BlackRock’s role due to inadequate climate strategies, highlighting ongoing concerns about stewardship and climate accountability. The Sierra Club has actively supported these efforts, advocating for stronger oversight and strategic leverage to push asset managers toward responsible climate practices.
Several European pensions have already cut ties with BlackRock over climate issues, reflecting a broader trend of holding managers accountable for climate performance. NYC’s leadership in climate-related financial risk management has positioned it as a key player in the movement toward responsible public investment.
“This search is an opportunity to put climate-risk standards into action and make clear that firms cannot keep major pension mandates without credible climate-risk management and responsible stewardship.”
— Ben Cushing, Sierra Club
Quantitative Methods for ESG Finance
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Uncertainties Around Implementation and Manager Compliance
It remains unclear how strictly the city will enforce climate standards during the selection process, or how existing managers like BlackRock will respond to potential non-renewal of mandates. Details on specific criteria, evaluation processes, and timelines for final decisions are still emerging.
Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Next Steps in Asset Manager Selection and Climate Accountability
The city will review proposals from asset managers, assessing their climate strategies and stewardship practices. Final decisions on mandate renewals or reallocations are expected later in 2026, with ongoing monitoring of managers’ climate performance and stewardship activities. The Sierra Club and other stakeholders will likely continue advocating for accountability and transparency throughout this process.
net-zero investment strategy reports
As an affiliate, we earn on qualifying purchases.
As an affiliate, we earn on qualifying purchases.
Key Questions
What criteria will NYC use to evaluate asset managers’ climate performance?
The city has indicated it will assess managers’ climate risk management, stewardship practices, transparency, and alignment with net-zero commitments, but specific evaluation metrics are still being finalized.
Could BlackRock lose its mandate due to climate performance issues?
Yes, if BlackRock or other managers fail to meet the city’s climate standards, they could be replaced when contracts are renewed or reissued later in 2026.
How significant is this move for public pension investment practices?
This marks a notable shift toward integrating climate risk considerations into public pension management, potentially influencing other large funds to adopt similar standards.
Will other investors follow NYC’s lead in re-evaluating asset managers based on climate criteria?
It is likely, as more institutional investors are recognizing climate risk as a systemic financial threat and are increasingly demanding responsible stewardship from their managers.
Source: CleanTechnica
