New York City Comptroller Mark Levine announced that he is recommending a strategic expansion in private markets climate solutions investments for three of the City’s public pension funds, with plans to present $5 billion in new private market investment opportunities.
New York City’s pension funds represent nearly $300 billion in assets – making them collectively one of the largest public pension systems in the U.S. – 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.
In 2022, the NYC pension boards launched a Net Zero Implementation Plan, including a target to achieve net zero emissions by 2040, and implementing climate solutions investing as a pillar, with a goal of investing $37.8 billion by 2035.
The Comptroller’s office noted that progress on climate solutions investments to date has mostly come from the appreciation of technology stocks in the passive portfolios, and presented private market proactive climate investing strategy as a step toward meeting the pension system’s goal.
The new private market opportunities will be focused on areas including renewable power generation, grid modernization, energy efficiency and storage, clean transportation, and building decarbonization, as well as technologies that can reduce pollution, strengthen energy and water security, and improve resilience to extreme weather. Investment opportunities will be presented to each pension board for consideration and approval, subject to each of the three Systems’ independent due-diligence and fiduciary review processes.
According to the Comptroller’s office, the new initiative comes as rising energy prices, geopolitical uncertainty, and growing energy demand are putting renewed pressure on energy costs, driving demand for more reliable and resilient energy infrastructure, and presenting attractive investment opportunities for the city’s pension systems.
Levine said:
“Our pension systems have a responsibility to make sound investment decisions that preserve and grow the retirement assets that our pensioners depend on. As the climate crisis places a growing strain on our infrastructure and the broader economy, investing in cleaner, more reliable and resilient energy that can lower costs and reduce emissions at the same time is an essential part of our prudent long-term investment strategy.”
