Trump administration's stance on responsible investment being detrimental to business has been contested, as per NYC Comptroller Lander, who asserts that the city's investment professionals have demonstrated otherwise.
New York City's public pension funds, managing a combined capital of $294.6 billion, have demonstrated impressive financial performance while implementing a responsible investment strategy focused on climate solutions and asset allocation.
The five retirement systems, led by Comptroller Brad Lander and the trustees, announced an aggregate investment return of 10.3% for the fiscal year ending 30 June 2025, surpassing the actuarial target of 7%. This strong performance has reduced the city’s pension obligations by approximately $2.18 billion over the next five fiscal years.
The funds' focus on climate solutions is evident in their efforts to mitigate financial risks from climate change and systemic issues. They have developed Net Zero Implementation Plans targeting portfolio greenhouse gas emission reductions, aiming for net zero emissions by 2040, with a 37% reduction already achieved between 2019 and 2024.
Responsible investing is embedded as a core component of risk mitigation and portfolio resilience, supported by diverse asset management and economically targeted investments, including significant allocations to minority- and women-owned managers. In FY 2024, investments in these managers amounted to $23.1 billion, a 37.5% increase.
The largest exposure of the NYC pension funds' investment portfolio is in public equities (43.4%), while the second largest exposure is in public fixed income (31.5%). The third largest exposure is in private market alternatives (25.2%).
Three of the five NYC pension funds (NYCERS, TRS, and BERS) have set a net zero target of 2040. By 2035, all five NYC pension funds are set to increase climate solutions allocations to $50bn.
Steven Meier, the chief investment officer of the NYC retirement systems, emphasizes the importance of a steady and long-term investment approach. This approach has been reflected in the funds' performance, with the three-year return at 9.4%, the return across five years at 8.5%, and across 10 years the funds achieved a return of 7.7%.
Comptroller Brad Lander claims that the strong investment returns offer timely evidence in favor of responsible investment. He also commented that the investment professionals have proven that responsible investment is not bad for business, contradicting the Trump administration's stance.
The NYC pension funds are also investing in local, low-carbon infrastructure projects, such as affordable housing and renewable energy projects in New York neighborhoods. This approach aligns with progressive pension reform ideals to couple sustainable economic development with secure retirements for public workers.
In conclusion, New York City’s public pension funds are leaders in responsible investing strategies that integrate climate solution commitments with strong financial performance. Their asset allocation reflects diversification, climate risk mitigation, social governance standards, and growing support for diverse managers and local green infrastructure investments.
- The NYC pension funds' focus on climate solutions extends to investing in local, low-carbon infrastructure projects like affordable housing and renewable energy projects in New York neighborhoods.
- The five retirement systems, including NYCERS, TRS, and BERS, have set a net zero target of 2040 and are aiming to increase climate solutions allocations to $50bn by 2035.
- Steven Meier, the chief investment officer of the NYC retirement systems, believes in a steady and long-term investment approach, which has been reflected in the funds' consistent performance.
- Comptroller Brad Lander argues that the strong investment returns of the NYC pension funds provide evidence in favor of responsible investment, contradicting the stance taken by the Trump administration.
