NYC Pension Funds Flag BlackRock and Fidelity as Insufficiently Aligned on Climate

New York City's pension funds have declared that asset managers BlackRock and Fidelity remain 'insufficiently aligned' with the system's net zero investment expectations, raising the prospect of mandate termination. The findings are included in the pension system's Fiscal Year 2025 Annual Climate Reports, which also reveal a 48.13% weighted average reduction in portfolio financed emissions since 2019.

The NYC pension system — comprising NYCERS, TRS, and BERS and managing nearly $300 billion in assets — launched a Net Zero Implementation Plan in 2022 with a 2040 net zero target and requirements for asset managers to submit decarbonisation plans. Former Comptroller Brad Lander recommended in December 2025 that the system drop a $42 billion investment mandate with BlackRock, citing its failure to submit plans aligned with net zero goals. BlackRock at the time characterised the recommendation as a politicisation of pension management.

The new reports confirm that BlackRock and Fidelity continue to fall short of the system's climate expectations, while PanAgora has strengthened its approach sufficiently to be considered aligned. The assessment highlights concerns about approaches taken by BlackRock and Fidelity in complying with Trump administration directives on SEC reporting, which led to more restrictive positions on proxy voting and shareholder engagement than those of peer asset managers. NYC Comptroller Mark Levine described the pension system's decarbonisation results as evidence that climate integration and strong financial returns can coexist.

The situation puts two of the world's largest asset managers under continued scrutiny from a significant institutional client, with potential implications for mandate retention and broader industry norms around climate alignment. As pension systems globally — including emerging systems in Asia — assess how to embed climate expectations into their manager selection and retention processes, the NYC pension funds' detailed framework for monitoring and enforcement represents a model worth watching. Decisions on potential mandate changes are expected to be communicated in the coming months.

Key figure — $42 billion BlackRock investment mandate previously recommended for termination