Sierra Club Welcomes NYC Pension Search for Asset Managers, Urges Strong Climate Accountability

New York City’s public pension systems have launched a search for asset managers to oversee passive indexing services, signalling a significant review of major mandates, including those currently held by BlackRock and State Street. This initiative is timed with the expiry of existing contracts by the end of 2026 and aims to prioritise climate-related performance as a key criterion in selecting firms. The city’s pension funds collectively manage over $127 billion in public equity investments, predominantly in passive index products, with some strategies now incorporating climate and ESG factors in line with investment guidelines. Three of the city’s pension systems—NYCERS, TRS, and BERS—have committed to net-zero emissions targets by 2040 and have established clear climate expectations for their asset managers. Recent climate reports from these systems indicate that while most managers align with net-zero goals, BlackRock has consistently fallen short in meeting these standards. This ongoing scrutiny follows a multi-year effort to embed climate accountability into asset manager selection, making stewardship and transparent climate risk management essential components of fiduciary responsibility. The Sierra Club has welcomed the pension systems’ approach, emphasising the importance of enforcing climate-risk standards through this search. Ben Cushing, Director of the Sierra Club’s Sustainable Finance Campaign, highlighted that passive index managers still exercise significant influence through stewardship and proxy voting, responsibilities that must not be neglected. He urged that firms like BlackRock demonstrate credible and enforceable climate plans to retain mandates or face losing business to more accountable competitors. This development builds on previous actions by New York City pension trustees, including a 2025 directive for asset managers to submit net-zero plans and warnings that failure to comply could result in losing pension business. The Sierra Club has consistently advocated for stronger consequences for poor climate stewardship, noting that some major UK and European pension funds have already divested from firms like BlackRock over similar concerns. The outcome of this search could set a precedent for public pensions across the United States in holding asset managers to stringent climate-risk standards. New York City’s pensions have positioned themselves as leaders in addressing climate-related financial risks, and the Sierra Club calls for continued progress in implementation. Ensuring that investment managers meet robust climate-risk management criteria is seen as vital to protecting the retirement security of public workers while advancing the city’s broader climate commitments. The ongoing scrutiny of asset managers reflects a growing expectation that fiduciary duty must include credible climate accountability in an era of escalating environmental challenges.