New NYC comptroller ‘deep in review’ of Lander manager recommendations

Ayman Siam/Office of NYC Comptroller

Newly elected New York City comptroller Mark Levine is “deep in review” of recommendations by his predecessor Brad Lander to pull pension mandates from BlackRock and Fidelity Investments.

In his first interview with a financial news publication, Levine told Responsible Investor that his office was “actively” reviewing the input from Lander’s office.

“We are deep in review of everything he recommended and I take our climate goals very seriously,” Levine said. “I think we should hold our fund managers to extremely high standards.

“We’re looking at our fund managers to understand whether they are indeed living up to those standards, and we’re going to continue to hold every fund manager to extremely high standards on climate.”

Lander recommended late last year that three of the city’s five pension systems drop BlackRock, Fidelity Investments and PanAgora Asset Management after the firms failed to satisfy expectations for decarbonisation plans and stewardship. PanAgora was subsequently removed from the list after resubmitting an improved decarbonisation plan.

However, trustees of the New York City Employees’ Retirement System, Teachers’ Retirement System and Board of Education Retirement System did not vote on whether to accept Lander’s recommendations before he left office at the end of 2025.

Levine said he was unable to comment on whether Lander’s recommendations were a course of action that he was committed to, given the ongoing review.

Under previous comptrollers, the New York City pension systems have been active shareholder advocates, filing resolutions on topics from banks’ green financing ratios to freedom of association.

Levine “intends to continue that level of activism”, he told RI, adding that the comptroller’s office is working on proposals for this year’s proxy season. “We are going to be activist,” he said. “We continue to care about climate and housing and transparency and more.”

Given current regulatory challenges with the filing of shareholder proposals in the US, Levine said “all options are on the table” when it comes to alternative tactics, including vote-no campaigns against directors and strategic litigation. “This office has used those tools in the past, and we wouldn’t hesitate to use them in the future.”

Housing focus

A key campaign issue for Levine was affordable housing in New York City.

While acknowledging that his “number one obligation is to serve as the fiduciary of the pension system to ensure that we maximise risk-adjusted returns and are good stewards of retirement savings”, Levine said the NYC pension portfolios could help address housing affordability in the city.

This includes by helping finance affordable housing that “otherwise wouldn’t get built” or might be lost to affordability. He also highlighted previous work by the NYC pension systems to set expectations of investee companies that own rental housing.

Under the current strategic asset allocation, the systems can deploy up to 2 percent of their portfolio in “economically targeted investments”. These are defined as investments that boost the New York economy while also meeting the same standards for risk-return as the rest of the portfolio.

The systems are currently at a 1 percent allocation, and Levine is keen to see this rise towards the cap.

“I’d like to make affordable housing the top priority in those additional investments,” he said. “I’ve already started talking to the trustees about this.

“It’s a very early stage but I certainly intend to bring investment recommendations to them that achieve risk-adjusted returns consistent with our goals but also advance the cause of building more affordable housing in New York.”

The systems will soon begin a strategic asset review – held roughly every three years – that will give the comptroller’s office an opportunity to examine affordable housing, green infrastructure and other climate issues, Levine added.

From president to comptroller

Born in Chicago, Levine worked as a teacher in his early career before founding a co-operatively owned credit union in New York. He was elected to the city council in 2014 and became borough president for Manhattan in 2021.

Becoming the city’s comptroller, he told RI, is “in a sense, a job I’ve been preparing for my entire life”.

Founding a credit union provided “a good grounding in the power of finance and economics to create opportunity and to advance towards the goal of equity”, he said. “I see myself as working on those goals on a grand scale now.”

He added: “This office is important at any time, because really city government doesn’t function without a well-run comptroller’s office. We have real, severe challenges here. So I think the office is going to be more relevant than ever and more important than ever, and I couldn’t be more excited to be taking on this new role.”

Asked about other ambitions for his term, Levine said he had “a broader agenda to help modernise city government, using the powers of this office to really drag us into the 21st century”.

Flagging the fact that some city processes still use fax machines, he added: “Modernising city government will be a major goal of mine, so we have better services for people in need and better for taxpayers.”