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

New York City’s pension systems have launched a search for new asset managers, emphasizing climate risk management as a central criterion. The move aims to align investment practices with the city’s net-zero commitments and responsible stewardship standards, affecting major firms like BlackRock and State Street.

On March 26, 2026, NYC Comptroller Mark Levine and trustees of the city’s five public pension funds announced they are reviewing and potentially replacing current passive index managers, with a focus on climate and ESG factors. The review includes managers managing over $127 billion in public equity investments, most of which are in passive index products. The pension systems—NYCERS, TRS, and BERS—have adopted net-zero by 2040 plans and have set climate expectations for their asset managers.

In recent annual climate reports, these systems found that most of their public-market managers align with their net-zero goals, but BlackRock remains rated as insufficiently aligned across all three. The search is part of a multi-year effort to enforce climate standards through manager selection, with an emphasis on credible climate plans, stewardship, and responsible reporting. The process follows previous steps in which the city’s pension funds warned managers that failing to meet climate standards could result in losing mandates.

Ben Cushing, director of the Sierra Club’s Sustainable Finance Campaign, responded positively, stating that the pension system’s standards create an opportunity to enforce credible climate risk management and responsible stewardship. He emphasized that asset managers, including BlackRock, must demonstrate improvements or risk losing business, highlighting the systemic financial risk posed by climate change.

Impact of Climate Standards on Pension Management

This development underscores a shift in public pension management toward integrating climate risk considerations into investment decisions. It signals that large institutional investors are increasingly holding asset managers accountable for responsible stewardship, which could influence industry practices nationwide. The move also reflects growing pressure for firms managing public funds to demonstrate credible climate strategies, aligning financial returns with climate resilience.

Previous Steps in NYC Pension Climate Policy

In April 2025, NYC’s pension systems established standards requiring asset managers to submit net-zero plans, warning that failure to comply could lead to loss of mandates. In November 2025, former Comptroller Brad Lander recommended re-evaluating BlackRock’s management of tens of billions of dollars due to inadequate climate strategies. The Sierra Club has actively supported these efforts, urging continued tightening of standards and accountability. Several European pensions have already severed ties with BlackRock over climate concerns, setting a precedent for responsible stewardship in large-scale public investments.

“New York City’s pension systems have set clear climate-risk standards for the asset managers entrusted with public workers’ retirement savings. This search is an opportunity to put those standards into action and make clear that firms cannot keep major pension mandates without credible climate-risk management, responsible stewardship, and alignment with the pensions’ long-term fiduciary obligations.”

— Ben Cushing, Sierra Club

Unclear Details on Implementation and Outcomes

It is not yet clear how strictly the city will enforce climate standards in the manager selection process or what specific criteria will be used to evaluate firms like BlackRock and State Street. The timeline for replacing current managers and the potential impact on existing mandates remain uncertain. Additionally, the extent to which other asset managers will meet or fail these standards is still developing.

Next Steps in the Asset Manager Review Process

The city will conduct a comprehensive review of proposals from asset managers, assessing their climate risk management strategies, stewardship practices, and transparency. The process is expected to culminate in new contract awards or renewals by the end of 2026. Stakeholders, including advocacy groups like the Sierra Club, will monitor these developments closely, advocating for strong climate commitments and responsible stewardship in the final selection.

Key Questions

Why is NYC pension reviewing its asset managers now?

The review aligns with the city’s commitments to net-zero by 2040 and aims to ensure that managers responsible for billions in public funds adhere to strong climate and stewardship standards, especially in light of previous concerns about firms like BlackRock.

What criteria will be used to select new asset managers?

The selection will prioritize firms demonstrating credible climate risk management, responsible stewardship, transparent reporting, and alignment with the pension funds’ net-zero goals, as outlined in recent standards and reports.

Could this lead to BlackRock losing its mandate?

Yes, if BlackRock or other current managers fail to meet the city’s climate standards, they could be replaced in upcoming contract renewals by firms with stronger climate commitments.

How does this impact public pension investments nationally?

This move could set a precedent for other public pension funds to prioritize climate standards in their manager selection, potentially influencing industry practices across the U.S. and beyond.

What role does the Sierra Club play in this process?

The Sierra Club advocates for stronger climate standards and responsible stewardship in pension investments, supporting the city’s efforts and urging firms to improve their climate strategies to retain mandates.

Source: CleanTechnica