The Trustees of the New York City Pension Funds announced that they will conduct the first-ever carbon footprint analysis of their portfolios and determine how to best manage their investments with an eye toward climate change. In the 21st century, companies must transition to a low-carbon economy, and a failure to adapt to the realities of global warming could present potential investment risks. As part of the initiative, the funds have selected two independent advisors to examine the associated short- and long-term investment risks.
The move to study the portfolios’ climate change exposure and conduct the first-ever carbon footprint analysis is the latest step in a series of other initiatives to address climate change risks, including the Boardroom Accountability Project, which gives investors the ability to ensure boards are diverse and climate-competent.
“There’s no question climate change is transforming both our planet and the international economy. Every corner of the globe is feeling the economic, physical, and social impacts,” New York City Comptroller Scott M. Stringer said. “This crisis isn’t going away – and we have to take decisive action. These advisors will help the Pension Funds continue to create long-term, sustainable growth for New York City’s retired firefighters, police officers, teachers, and other public employees.”
The Funds have selected Mercer Investment Consulting LLC to determine how to incorporate the realities of global warming into the Funds’ asset allocation, manager selection, and risk management processes. Mercer is recognized globally as a leading investment consultant on climate change investment risk and Environmental, Social, and Governance investing.
In addition, four of the Funds have selected Trucost plc to perform a carbon footprint analysis of their public equity investments. The Teachers Retirement System delegated their carbon footprint analysis to Mercer. This examination will measure the actual and estimated greenhouse gas emissions attributable to an investment portfolio and proportionally to its holdings.
The Funds approved the selection of these firms following a competitive selection process. The firms’ work will commence in early 2017 and is expected to be completed by the end of the year.
“New York City is a global leader when it comes to taking on climate change and reducing our carbon footprint. The selection of Mercer and Trucost will help our pension funds develop a long-term strategy to address the risks of climate change to our investment portfolios as well as to our City and our planet,” Mayor Bill de Blasio said.
In addition to Comptroller Stringer, the New York City Pension Funds’ trustees are:
New York City Employees’ Retirement System: Mayor Bill de Blasio’s Representative, John Adler (Chair); New York City Public Advocate Letitia James; Borough Presidents: Gale Brewer (Manhattan), Melinda Katz (Queens), Eric Adams (Brooklyn), James Oddo (Staten Island), and Ruben Diaz, Jr. (Bronx); Henry Garrido , Executive Director, District Council 37, AFSCME; John Samuelsen, President Transport Workers Union Local 100; Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.
Teachers’ Retirement System: Mayor Bill de Blasio’s Appointee, John Adler (Chair); Raymond Orlando; representing the Chairperson of the Panel for Educational Policy and Debra Penny, Thomas Brown and David Kazansky, all of the United Federation of Teachers.
New York City Police Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Finance Commissioner Jacques Jiha; New York City Police Commissioner James P. O’Neill (Chair); Patrick Lynch, Patrolmen’s Benevolent Association; Michael Palladino, Detectives Endowment Association; Edward D. Mullins, Sergeants Benevolent Association; Louis Turco, Lieutenants Benevolent Association; and, Roy T. Richter, Captains Endowment Association.
New York City Fire Department Pension Fund: Mayor Bill de Blasio’s Representative, John Adler; New York City Fire Commissioner Daniel A. Nigro (Chair); New York City Finance Commissioner Jacques Jiha; James Slevin, President, Gerard Fitzgerald, Vice President, Edward Brown, Treasurer, and John Kelly, Brooklyn Representative and Chair, Uniformed Firefighters Association of Greater New York; John Farina, Captains’ Rep.; Paul Ferro, Chiefs’ Rep., and Jack Kielty, Lieutenants’ Rep., Uniformed Fire Officers Association; and, Thomas Phelan, Marine Engineers Association.
Board of Education Retirement System: Schools Chancellor Carmen Fariña; Mayoral: Issac Carmignami, T. Elzora Cleveland, Vanessa Leung, Gary Linnen, Lori Podvesker, Stephanie Soto, Benjamin Shuldiner, Miguelina Zorilla-Aristy; Michael Kraft (Manhattan BP), Debra Dillingham (Queens BP), Geneal Chacon (Bronx BP) and Peter Calandrella (Staten Island BP); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.
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