Three of the five pension funds in the New York City Retirement Systems have hired advisers to help them divest holdings in companies that hold fossil fuel reserves, the city's comptroller and mayor said Tuesday.
The hiring is part of the process started in early 2018 when Scott Stringer, the city comptroller, and Mayor Bill de Blasio said the pension system would take steps to divest fossil fuels, which they defined as coal, oil and gas used for energy. Targets for divesting are companies that own fossil fuel reserves.
In December 2018, the comptroller's office on behalf of the three pension funds issued as RFP for investment advisers.
The contracts announced Tuesday were to Meketa Investment Group for the New York City Employees Retirement System, the New York City Board of Education Retirement System and the Teachers' Retirement System of The City of New York. The teachers' pension fund also hired BlackRock Financial Management Inc.
The three funds had total assets of $155.4 billion as of October, and fossil fuel reserve company investments account for about $3 billion, said a joint news release Tuesday from the comptroller's and mayor's offices.
The city pension funds representing police and firefighter are not participating. They have combined assets of $56.1 billion. The amount of their fossil fuel holdings was not immediately available. The funds announced their opposition to divestment in 2018. Each pension fund within the city system has a separate board of trustees.
"With the award of these contracts, the city pension funds are on track to have actionable plans to divest from fossil fuel reserve owners by late 2020," the news release said. The goal is for the separate pension fund boards to adopt a plan and begin divesting in 2021, the news release said.
"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," Mr. Stringer said in the news release. Mr. Stringer is the fiduciary for the five pension funds in the city system.
"While the Trump administration fails to address global warming as the crisis it is, New York City is taking action," Mr. de Blasio said in the news release.
The pension funds' goal is to "double investments in climate solutions such as wind, solar power, energy efficient buildings and more to over $4 billion by 2021," the news release said.
To help accomplish the goal, the comptroller's office has issued a notice of search to help all five pension funds select investment managers. (Registration required).
The funds will be looking to invest "in companies that generate revenue from climate mitigation, adaption and resiliency such as renewable energy, energy efficiency, green buildings and electric vehicle energy storage," the news release said.
The application deadline is Feb. 21. Evaluations and interviews will take place from May to September. The contracts are schedule to start Feb. 1, 2021.
