New York City Comptroller Brad Lander announced that he has recommended that the city’s pension funds drop a $42 billion investment mandates with BlackRock, as well as those with Fidelity and PanAgora, over the asset managers’ failure to submit decarbonization plans that were aligned with the pension system’s net zero investment goals.

The Comptroller’s new recommendation focused largely on the approach the asset managers have taken towards complying with the Trump administration’s new reporting requirements to the SEC, which have led BlackRock and Fidelity to take more restrictive approaches on engagement and proxy voting than other large asset managers’ according to Lander, with BlackRock ceasing proactive engagement on proxy voting issues with U.S. companies where it owns 5% or more, and Fidelity applying restrictions to both U.S. and non-U.S. companies to prevent influencing them on decarbonization.

New York City’s pension funds represent over $294 billion in assets, and include the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System (TRS), and Board of Education Retirement System (BERS). The Comptroller is the investment advisor to and custodian of assets of the city’s pension funds.

Lander’s new recommendations follows the launch by the NYC pension boards in 2022 of a Net Zero Implementation Plan, including a goal to achieve net zero emissions by 2040. As part of the plan, asset managers were required to submit net zero plans by the end of June 2025.

Earlier this year, Lander announced increased demands on asset managers to align their investments with the city’s climate goals, including requirements to submit strong net zero action plans, and to set expectations for all portfolio companies to set full value chain net zero goals. The Comptroller said that the net zero plans will be evaluated based on requirements for asset managers to engage portfolio companies to drive real economy decarbonization, rather than just decarbonizing portfolios, to incorporate material climate change-related risks and opportunities in investment decision-making, and to put in place a stewardship strategy addressing prioritization and escalation of engagement and voting to advance decarbonization.

In his new update, Lander said that 46 of the pensions system’s 49 investment managers submitted decarbonization plans aligned with the city’s net zero goals, but recommended rebidding rebid BlackRock’s more than $42 billion U.S. public equities index mandates, and that it terminate those of active managers Fidelity and PanAgora.

Lander said:

“The systemic risk of the climate crisis threatens the long-term value of New York City’s pension funds. Our Net Zero plan is a core part of our fiduciary duty to protect these assets. I am pleased to report that 46 of our 49 public markets managers are aligned with our expectations for decarbonization; unfortunately, three are not. Today, I am calling on my fellow trustees to move our money away from the three asset managers – BlackRock, Fidelity, and PanAgora – who fail to address climate risk with the seriousness we expect.”

In a letter to Lander following the recommendation, BlackRock called the Comptroller’s statements “another instance of the politicization of public pension funds, which undermines the retirement security of hardworking New Yorkers,” noting that the asset manager has had multiple conversations over the past several months with the New York City Bureau of Asset Management (NYC BAM) investment team regarding its investment and decarbonization objectives, and told the team that its Climate and Decarbonization Stewardship program, set up for clients that have explicit climate and decarbonization investment objectives, is available for each of the city’s pension plans.

BlackRock added:

“Any change to one of the five pension plan portfolios would be subject to a review process involving the plan’s Board, the NYC BAM investment team, and other relevant stakeholders. Should they take up your recommendation, we look forward to demonstrating the breadth and depth of our capabilities and the tremendous value we deliver to NYC BAM and 750,000 dedicated public servants. In the meantime, we remain focused on delivering returns for New York City’s public-sector employees so they can enjoy their hard-earned retirements.

“BlackRock was founded in New York City, and we are proud to call it our home. We look forward to continuing to serve NYC BAM and the city’s pensions as you pursue your next career opportunity.”