TL;DR
New York City pension trustees are conducting a search for asset managers with a focus on climate performance, including those managing current mandates like BlackRock. The Sierra Club welcomes this move, emphasizing the importance of credible climate risk management. The process aims to ensure responsible stewardship and align investments with net-zero goals.
New York City’s pension systems have announced a search for asset managers that will prioritize climate risk management, opening the door for potential changes in major mandates, including those currently held by BlackRock and State Street. This move, announced by NYC Comptroller Mark Levine and the pension trustees, underscores a broader effort to align investment practices with the city’s climate commitments and fiduciary responsibilities.
The search involves identifying asset managers capable of providing passive indexing services with a focus on climate and ESG factors, in line with the city’s investment guidelines. The current contracts for passive index management are set to expire by the end of 2026, prompting a review of existing managers’ climate performance.
Three of the city’s pension systems—NYCERS, TRS, and BERS—have adopted net-zero by 2040 plans and have established climate expectations for their asset managers. Recent reports indicate that most managers are aligned with these goals, though BlackRock remains assessed as insufficiently aligned across all three systems, according to the latest annual climate reports.
Ben Cushing, Director of the Sierra Club’s Sustainable Finance Campaign, highlighted the importance of this process, emphasizing that asset managers must demonstrate credible climate-risk management and responsible stewardship to retain or secure new mandates. He warned that firms failing to meet these standards could lose business, reinforcing the city’s commitment to climate accountability in its investments.
Impact of Climate Standards on Pension Asset Management
This development signals a shift toward integrating climate considerations into the core of public pension investment strategies, potentially influencing how large-scale institutional investors select and evaluate asset managers. It underscores the increasing importance of climate risk management as a fiduciary duty, and could set a precedent for other public pension funds nationwide to adopt similar standards.
By prioritizing managers with credible climate plans, New York City’s pension systems aim to mitigate systemic financial risks associated with climate change, safeguard retirement assets, and demonstrate leadership in sustainable investing. The move also puts pressure on major firms like BlackRock to improve their climate stewardship or risk losing significant business.
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Background on NYC Pension Climate Commitments
Since April 2025, NYC pension systems have set standards requiring asset managers to submit net-zero plans, warning that failure to meet these standards could result in losing mandates. The city’s efforts follow a series of actions, including a 2025 review that questioned BlackRock’s climate plans, citing persistent gaps in stewardship and engagement practices.
In November 2025, former NYC Comptroller Brad Lander recommended re-evaluating BlackRock’s role managing billions of dollars due to inadequate climate strategies. The Sierra Club has actively supported these efforts, urging the city to leverage its influence to push for stronger climate accountability among asset managers. Several European pension funds have already divested from BlackRock over similar concerns, highlighting a growing global trend toward climate-conscious investment policies.
“This search is an opportunity to put climate standards into action and enforce responsible stewardship, ensuring firms cannot keep major mandates without credible climate-risk management.”
— Ben Cushing, Sierra Club
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Uncertainties in Asset Manager Selection Outcomes
It is not yet clear which asset managers will successfully meet the city’s climate standards and secure new mandates. The evaluation process is ongoing, and the impact on existing managers like BlackRock remains uncertain, including whether they will undertake significant reforms to retain business.
Additional details about the specific criteria and weighting of climate performance in the selection process are still emerging, as the city finalizes its review procedures.
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Next Steps in the Asset Manager Review Process
The city will continue its review process, engaging with potential asset managers and assessing their climate risk management practices. The final selection is expected to be announced before the expiration of current contracts at the end of 2026.
Further, the city may impose stricter climate-related reporting and stewardship requirements on new managers, setting a benchmark for responsible investment practices in public pension funds.
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Key Questions
Will BlackRock lose its current pension mandates?
It is not yet confirmed whether BlackRock will lose its mandates, but the city’s standards and recent assessments suggest that firms failing to meet climate expectations may face losing business in future contract renewals.
What criteria will the city use to select new asset managers?
The selection will prioritize climate risk management, responsible stewardship, ESG integration, and alignment with the city’s net-zero goals, though specific weighting details are still to be finalized.
Could this move influence other public pension funds?
Yes, as a leading example, NYC’s emphasis on climate standards could encourage other public pension systems nationwide to adopt similar practices, increasing accountability among asset managers.
How might this impact existing managers like BlackRock?
Existing managers will need to demonstrate credible climate strategies to retain mandates; otherwise, they risk losing business to firms with stronger climate stewardship practices.
When will the final decision be announced?
The city aims to complete its review and announce new asset manager selections before the current mandates expire at the end of 2026.
Source: CleanTechnica
