New York City Comptroller Brad Lander, in his weekly Protecting New York from Donald Trump, announced the strengthening of climate accountability across Wall Street. The Comptroller warned asset managers and impact investors that failing to deliver robust Net Zero plans by June 30, 2025, will result in losing mandates for the city's $280 billion in pension funds.
“Our new standards demand that the retirement systems’ managers strengthen their Net Zero plans consistent with their fiduciary duty—or we will find new asset managers who will,” said Comptroller Brad Lander.
Let’s explore the new climate criteria set by New York for asset managers in detail.
The 2040 Net-zero commitment of the firms
In December 2020, former Comptroller DiNapoli announced that the Fund has adopted a goal to achieve net zero greenhouse gas emissions by 2040 all over its portfolio. This goal was set to make sure that the pension funds portfolio is adapting to the needed transition as the world moves toward net zero emissions targets by 2050. In 2022, when Lander took office, he proposed more implementation plans.
New Standards, deadline and participants for climate accountability
NYC’s move sets a precedent for other large institutional investors. The city not only requires net zero plans from asset managers but also expects them to actively engage portfolio companies to decarbonize and incorporate climate risks and opportunities into investment decisions.
The public markets managers face a June 2025 deadline, and the private market managers that NYC pension funds invest in after that date will also be expected to have net zero or alternative decarbonization plans.
For some funds, like the Teachers’ Retirement System, private market managers have until June 2026. This means private equity, venture capital, and other private market participants are directly in scope and must prepare to meet similar standards.
How it affects asset managers and private market firms?
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Mandate Risk
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Managers who fail to submit or meet net zero standards risk losing NYC pension business.
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Competitive Pressure
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Asset managers with strong climate plans gain a competitive edge in winning mandates
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Operational Changes Required
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Firms must develop, implement, and disclose robust net zero strategies, including for Scopes 1, 2, and 3 emissions.
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Active Engagement and Stewardship
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Managers must engage with portfolio companies and escalate efforts to drive real-world decarbonization.
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Reporting and Transparency
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Enhanced disclosure on emissions, climate risks, and progress toward targets is now expected.
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Private Markets Inclusion
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Private equity and other private market firms are required to align with these standards for new investments.
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Market Leadership and Opportunity
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Impact and climate-focused managers may see increased capital flows and validation of their strategies.
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