New York City pension funds hire consultant Meketa and Blackrock for pioneering fossil divestment strategy

New York City also puts out call for investment managers for climate solutions investments

New York City public pension funds have appointed Massachusetts based consultant Meketa Investment Group and Blackrock to advise on their fossil fuel divestment plans.

Meketa, which recently advised California’s new state-backed auto enrolment pension scheme CalSavers on its ESG option, will now work with three of the City’s five public pension pots on a “comprehensive and prudent divestment strategy”.

Those funds are New York Employees’ Retirement System (NYCERS), New York City Board of Education Retirement System (BERS) and New York City Teachers’ Retirement System (TRS).

Separately, TRS has announced a contract with BlackRock Financial Management in relation to the divestment, the City has revealed.

The Office of New York City Comptroller, Scott Stringer also released a “Notice of Search (NOS)” for “public markets investment managers” to help double its investments in climate solutions – a move it announced in September 2018. 

"While the Trump Administration fails to address global warming as the crisis it is, New York City is taking action" — Bill de Blasio

In January 2018, Comptroller Stringer announced that the City’s five funds would be the first in the US to explore divesting their estimated $5bn in fossil fuel holdings within five years. 

Since then New York City Police Pension Fund and the New York City Fire Pension Fund have not been referenced in relation to the divestment plans. 

The remaining three participating funds, with total holdings of more than $155bn, hold roughly $3bn in the securities of fossil fuel reserve owners.

Today’s appointments has been described by the City as the “next major step” towards “achieving a first-in-the-nation goal to divest New York City’s largest pension funds from fossil fuel companies”.

The pension funds should have “actionable plans to divest from fossil fuel reserve owners by late 2020”, according to the statement. It is expected that the pension fund boards will be able to adopt a plan and begin execution in 2021.

“While the Trump Administration fails to address global warming as the crisis it is, New York City is taking action,” said Mayor Bill de Blasio. “We are dedicated to delivering what we owe to our children and grandchildren, which is why we’re the first in the nation to take major steps to divest from fossil fuels and invest in climate solutions.”

“New York City is standing up for our people, our pensioners, and the only planet we have because the future is on the side of big ideas in clean energy — not big polluters,” added New York City Comptroller Scott Stringer. 

“Climate change is the most pressing challenge of our time, and we need to meet our climate emergency with every tool at our disposal to protect our children and our children’s children. In accordance with our fiduciary duty, the Trustees are taking the next major step in our first-in-the-nation divestment goal and leading the charge toward a clean, green and sustainable economy. Our city workers and our future deserve nothing less.”