Meketa Investment Group has been selected to evaluate options and develop a prudent divestment strategy from fossil fuel companies in alignment with the fiduciary duties for New York City’s largest pension funds, the city’s mayor and comptroller announced.
“While the Trump administration fails to address global warming as the crisis it is, New York City is taking action,” said Mayor Bill de Blasio. “We are dedicated to delivering what we owe to our children and grandchildren, which is why we’re the first in the nation to take major steps to divest from fossil fuels and invest in climate solutions.”
Trustees of the pension fund agreed to divest from fossil fuel reserves by 2023, according to a January 2018 agreement. The effort will see through “one of the most significant divestment efforts in the country to date,” with the city’s funds withdrawing approximately $3 billion in the securities of fossil fuel reserve companies.
Meketa is tasked with developing a comprehensive plan by the end of 2020 to carry out these divestment efforts, allowing the city to begin execution of its plan by 2021.
The mayor and NYC Comptroller Scott Stringer announced the issuance of a new Notice of Search for city pension funds’ investment in climate solutions. The pension funds will select public markets managers to help fulfill the comptroller’s efforts and double investments in climate solutions.
“Fossil fuel divestment must be responsible and thoughtful, and the vast experience that Dr. Sarah Bernstein and her team at Meketa bring to this assignment helps ensure that it will be,” said Henry Garrido, a trustee of the New York City Employees’ Retirement System (NYCERS). “Divestment of NYCERS’ investment portfolio away from fossil fuels is a necessary first step to transitioning to a renewable and sustainable future and there is no time to lose.”
On a parallel track, The New York State Common Retirement Fund appointed its first director of Sustainable Investments and Climate Solutions several weeks ago. Andrew Siwo’s responsibility is to support the implementation of New York State Comptroller Thomas P. DiNapoli’s Climate Action Plan, which calls for divestment from companies that fail to address minimum carbon-emissions standards.
“Climate change is one of the most significant risks facing investors and the warnings are growing increasingly dire,” DiNapoli said.
Last summer, DiNapoli pledged to double the New York State Common Retirement Fund’s sustainable investments, and bring the pensions environmental, social, and governance investments to $20 billion over the next decade.
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