New York City’s pioneering fossil fuel divestment RFP [request for proposal], which was put to the market last month, attracted leading ESG and investment figures to a meeting at this week at New York City Comptroller Scott Stringer’s offices.
Last month, Stringer’s office, which oversees the City’s $191bn public pension assets, said in an RFP that it is looking to “identify a firm or firms” to provide “investment analysis, evaluation, and advice” on developing “a comprehensive and prudent divestment strategy to preserve the retirement funds of City employees and address climate change risks, consistent with fiduciary duty”.
Mark Campanale, Founder of Carbon Tracker, the influential climate think tank behind ‘stranded assets and ‘unburnable carbon’ was among those at the ‘pre-proposal conference” on Tuesday.
He was joined by HSBC Asset Management’s Americas CEO Deborah Hazell and Boston-based SRI firm Trillium Asset Management’s CEO Matthew Patsky.
BlackRock, Goldman Sachs, Impax Asset Management and RBC Global Asset Management were among the other asset managers to attend.
ESG stalwart Cary Krosinsky’s firm Real Impact Tracker was represented by co-founder Patrick Reed.
Krosinsky is also currently a member of New York State Comptroller Thomas DiNapoli’s decarbonisation advisory panel, which is chaired by Joy Williams, former climate risk specialist at Canada’s Ontario Teachers’ Pension Plan.
DiNapoli has faced increasing pressure to exclude fossil fuels from the $209bn public pension pot he oversees after Stringer’s announcement last January that the City’s five funds would be the first in the US to explore divesting their estimated $5bn in fossil fuel holdings.ESG data providers Trucost and Sustainalytics also attended.S&P Dow Jones, which bought environmental specialist Trucost in 2016, was the only index provider to attend the meeting, according to the list released by Stringer’s office
Institutional Shareholder Services (ISS), which has bolstered its sustainability offering in the last few years with several acquisitions, was also in attendance.
Stringer’s office also released a list minority and women owned investment firms (MWBE) firms it has identified or have expressed an interest in the RFP.
A provision of the document is that the successful bidder(s) must “use its best efforts” to ensure that 10% of the contract’s value goes to minority and women owned businesses.
The document also revealed, however, that only three of the five funds overseen by Stringer – representing 70% of the City’s pension assets – are now participating in the process.
They are New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, and the New York City Board of Education Retirement System.
The New York City Police Pension Fund and the New York City Fire Pension Fund are not named.
All three participating pension systems will “seek legal advice” on any “contemplated divestment strategy or plan”, to ensure that it is consistent with their “fiduciary duty”, the document also explains.
The successful applicants will be given a year-long contract, with an option to renew for up to two additional years, to develop the divestment strategy. The contract is anticipated to begin this December.
The deadline for proposals is February 8.