TL;DR
New York City pension trustees are seeking new asset managers for their investments, prioritizing climate risk management. The Sierra Club welcomes this move and calls for accountability from firms like BlackRock.
New York City pension systems have launched a search for new asset managers, emphasizing climate-related performance as a key criterion, with the goal of aligning investments with their net-zero commitments. This move signals a shift toward holding asset managers accountable for credible climate risk management, a development that could influence public pension investment standards nationwide.
The NYC pension systems, which manage over $127 billion in public equity investments, announced they are reviewing their mandates for passive index managers, including firms like BlackRock and State Street. The review is driven by the expiration of existing contracts by the end of 2026 and a desire to ensure managers meet climate and ESG standards aligned with the pension funds’ net-zero by 2040 plans. Three systems—NYCERS, TRS, and BERS—have already adopted climate expectations, with recent reports indicating most managers are on track, except BlackRock, which remains insufficiently aligned according to assessments. The pension systems have previously set standards requiring managers to submit credible net-zero plans, and failure to meet these standards could result in losing mandates. The Sierra Club has publicly supported these efforts, emphasizing that asset managers must demonstrate credible climate strategies to retain or win business, citing systemic financial risks posed by climate change.
Implications for Public Pension Climate Leadership
This development underscores a growing trend among public pension funds to enforce strict climate standards on their asset managers. The move by NYC pension systems could set a precedent for other large institutional investors to prioritize climate risk management in their investment decisions. It highlights increasing scrutiny of firms like BlackRock, which have faced criticism for insufficient climate action, and signals a shift toward integrating climate considerations into fiduciary duties. For public workers and taxpayers, this could mean more responsible stewardship of retirement funds and greater influence on corporate climate practices. The Sierra Club’s support amplifies the message that climate responsibility is integral to financial stewardship and systemic risk mitigation.
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Background on NYC Pension Climate Commitments
Since April 2025, NYC pension systems have established standards requiring asset managers to submit net-zero plans and demonstrate responsible climate stewardship. In November 2025, former Comptroller Brad Lander recommended re-evaluating BlackRock’s mandate due to concerns over its climate strategies. The city’s pension funds have historically been leaders in addressing climate-related financial risks, with recent assessments showing progress but continued gaps, especially with firms like BlackRock. The ongoing review reflects a broader effort to ensure investment practices align with climate commitments and fiduciary responsibilities, amid increasing global pressure on asset managers to improve climate performance.
“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 Director
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Unresolved Questions About Asset Manager Selection
It is not yet clear which firms will be awarded new mandates, or whether BlackRock and other current managers will meet the new climate standards required to retain or secure contracts. Details of the evaluation process and criteria are still emerging.
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Next Steps in the NYC Pension Asset Management Review
The city will evaluate proposals from asset managers over the coming months, with final decisions expected before the current mandates expire at the end of 2026. The process will include assessing firms’ climate plans, stewardship practices, and transparency. The outcome could influence broader pension investment practices nationally and internationally, especially if firms like BlackRock are required to improve their climate strategies or face losing significant mandates.
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Key Questions
Why is NYC pension system reviewing its asset managers now?
The review is driven by the expiration of existing contracts and a strategic effort to ensure managers align with the city’s climate commitments, including net-zero by 2040, and responsible stewardship standards.
What standards are asset managers expected to meet?
Managers are expected to submit credible net-zero plans, demonstrate responsible climate stewardship, and align their practices with the city’s climate risk management expectations, as previously outlined by the pension systems.
Could this lead to BlackRock losing its current mandate?
It is possible if BlackRock or other managers fail to meet the city’s climate standards during the review process. The city has previously warned that firms not meeting standards could lose mandates.
How might this influence other pension funds?
If successful, NYC’s approach could serve as a model for other public pension funds to incorporate stricter climate criteria into their asset manager selection process, potentially shifting industry standards.
Source: CleanTechnica
