NYC comptroller calls out large institutions for DEI rollback

Amid the Trump administration’s recent efforts to eliminate the federal government’s diversity, equity and inclusion programs, New York City Comptroller Brad Lander is calling out institutions that are rolling back their DEI efforts and is seeking increased support for diverse and emerging managers alongside industry advocates.

“We are not here today simply to criticize. We’re here today to show our resolve,” Lander said at a Feb. 12 news conference in New York. “We will not bow down to forces of hate or baseless attacks. In fact, we are pushing forward.”

When U.S. President Donald Trump started his second term on Jan. 20, he signed several executive orders, including one that terminates DEI initiatives in the federal government, and another order that mandates federal agencies to determine which universities, foundations and public companies should be investigated for their DEI-related activities.

Outside of the executive orders, Trump has also claimed that DEI was responsible for the 2023 failure of SVB Financial Group, the withdrawal of military from Afghanistan and more recently — “and most absurdly,” according to Lander — the American Airlines plane crash in Washington on Jan. 29.

Lander — who serves as the custodian and a trustee of the $279.7 billion New York City Retirement Systems — has noted that investors and corporate actors have started to roll back their own DEI programs, “even without any legal reason to do so.”

“They’re obeying in advance, as scholars of authoritarianism have observed,” said Lander, notably calling out BlackRock, Vanguard and Institutional Shareholder Services. He noted that these companies have previously said diversity has improved their financial performance through their annual statements as well as the data they’ve put out.

“They’ve shown it in the results that they’ve brought forward that diversity is integral to fostering innovation and creativity, that it is consistent with fiduciary duty (and) that drives results,” he added. “They are pulling back not because they have some new evidence to the contrary. They are pulling back out of fear and cowardice.”

Spokespeople for BlackRock, Vanguard and ISS could not be immediately reached for comment.

At the same venue as the news conference, the New York City Retirement System was hosting its annual Diverse & Emerging Managers Conference. The annual event is part of the inaugural Emerging Managers Week, which is being held the week of Feb. 10. Several pension funds based in New York and Austin, Texas, are holding conferences at which asset managers can meet with investment staff at public pension funds.

Among those who joined Lander at the conference were the Rev. Al Sharpton, who noted DEI was created to “stop what was being done unfairly” to underrepresented groups. Sharpton, the president of the racial justice-focused National Action Network, has advocated for more diversity among endowment asset managers.

“Don’t act as though when we break the lock to open the door for everyone that we are giving someone a handout,” Sharpton said.

Graces Reyes, president and CEO of the Investment Diversity Exchange, a consulting firm focused on promoting diversity in the financial industry, questioned which of the three components of DEI people who apposed it were against.

"The opposite of all those three things is called discrimination,” she said, adding that ensuring DEI is about eliminating barriers that have kept “long-qualified talent from opportunities.”

“I firmly believe the timing is now to triple down on inclusion,” Reyes added.

During the opening panel of the annual conference, Lander was joined by Robert L. Greene, president and CEO of the National Association of Investment Companies, a group representing 194 diverse-owned alternatives managers.

More than 95% of pension fund investments made between 2012 and 2022 flowed to nondiverse managers, according to a recent NAIC report. Greene noted that the report also showed a positive correlation between the hiring of of diverse managers and the funding status of pension funds.

“So rather than fight about DEI, the next time you see a diverse manager, pat them on the back and thank them for their service,” Greene said.