Mayor Bill de Blasio, Comptroller Stringer, and other trustees of New York City’s pension funds have announced a new goal to double the investments of the NYC Funds in climate change solutions to $4 billion or 2% of the city’s $195 billion pension portfolio over the next three years.
To accomplish this objective, city pension systems will aim to double the existing $2 billion investment across all asset classes to reach $4 billion of investment in renewable energy, energy efficiency, and other climate solutions. This new target builds upon the funds earlier, ongoing goal to divest city pension funds from fossil fuel reserve owners within five years.
“New York City leads from the front when it comes to the fight against climate change,” said Mayor de Blasio. “We’re taking a stand for generations to come with our goal to double our pension investments in job-creating climate solutions. I know that other cities will look to our example, and I implore them to join us.”
Climate change poses significant threats to New York City. Rising temperatures; stronger, more destructive hurricanes; and increasing precipitation tied to climate change have already affected neighborhoods and communities across all five boroughs and are projected to become increasingly severe and costly over the coming decades. Only by eliminating the use of fossil fuels and reducing the carbon pollution that drives climate change can these challenges be fully addressed.
Since climate change is a global problem that cannot be solved by any one city, state, or country, Mayor de Blasio has committed to spreading tools, knowledge, and best practices by partnering with the City of London to create and co-chairing the Divest/Invest Cities Divestment Forum.
“Climate change demands bold solutions. In January, New York City pledged to divest its pension funds from fossil fuels,” said Daniel Zarrilli, NYC’s Chief Climate Policy Advisor and OneNYC Director. “Today, we’re going even bigger by doubling our investments in climate solutions and putting $4 billion to work in fiscally responsible investments into clean energy and energy efficiency. If all investors followed our lead, we could leave fossil fuels behind us, deliver on the Paris Agreement, and build a better world for our children.”
New York City is working to change the paradigm for public pension plans and set a new standard for how asset owners, such as pension funds, can use their substantial investments to both do well for our beneficiaries and do good for the planet. Climate change creates both risks to some investments and opportunities for other investments. As part of their fiduciary responsibility, city pension funds are working to address the risks and maximize the opportunities for its beneficiaries. Specific investments will be reviewed by the boards of individual pension systems consistent with their portfolio strategies.