Divest/Invest

Divest/Invest Leadership

New York City is a global leader in the movement to divest from fossil fuels and invest in climate solutions, with among the most ambitious pension goals in the world. By committing to remove fossil fuel assets from investment portfolios and increasing assets in sustainable companies and projects, NYC recognizes the dangerous business models of fossil fuel companies. They not only emit planet-warming and health-harming pollution, but also have experienced lagging stock market performance and weak outlooks, putting pension fund trustees at risk of breaching their fiduciary duty.

The City’s commitments include:

• Divest major pension funds from fossil fuels by 2022
• Increase investments to $8 billion in climate change solutions – such as renewable energy, energy efficiency, and green real estate – by 2025
• Further ramp up investments in climate solutions to $50 billion by 2035
• Achieve net-zero portfolio emissions by 2040

In 2018, NYC became the first major city in the nation to commit to divesting its major pensions from fossil fuels as part of its comprehensive plan to address climate change and hold fossil fuel companies accountable. The divesting funds, with over $198 billion in total assets under management, are the largest municipal pension plans in the country.

Following years of due diligence, risk evaluation, and trustee engagement, in January 2021, the City announced that the funds voted to divest approximately $4 billion from fossil fuel securities – launching one of the largest divestments in the world. To build on this progress, the pensions then adopted a goal and plan to achieve net-zero emissions by 2040, which is among the most ambitious net-zero portfolio targets globally.

Investments in Climate Solutions

To promote sustainable investment, NYC announced in 2018 a goal to double its investments in climate solutions to $4 billion by the end of 2021. This includes investments in companies that are measurably helping to facilitate the transition to a low-carbon economy consistent with goals established by the Paris Climate Accord or that are working on climate mitigation, adaption, or resiliency, such as renewable energy, energy efficiency, sustainable waste management, green buildings, and pollution prevention.

In March 2021, the City announced that it had invested $6 billion in climate solutions, surpassing its initial goal nearly a year ahead of schedule. If all U.S. pensions sustainably invested the same percentage of assets as NYC, half of the homes in the country could be solarized. To further build on this ambition, the City committed to invest $50 billion of pension funds in climate solutions by 2035.

Global Divest/Invest Leadership

It has become clearer over time that climate change poses a key threat to the global financial system. NYC is working with cities around the nation and around the world to scale up climate action efforts and share tools, knowledge, and best practices to ensure climate change and the interrelated issues of equity and social justice are addressed at a global scale.

To further galvanize global action, NYC has been making strides to grow the fossil fuel divestment and sustainable investment movement. In 2018, NYC partnered with London to found and co-chair C40’s Divest/Invest Forum, a first-of-its-kind initiative helping urban leaders take action. In addition to providing direct support to dozens of other cities to help them develop their own pension strategies, NYC also worked with London and the Forum in 2020 to release a toolkit for cities with a how-to guide setting a clear pathway for action.

The Forum, led by New York City and London, has 14 participating cities to date. Through the Forum, NYC also launched and recruited signatories for the “Divesting from Fossil Fuels, Investing in a Sustainable Future” declaration. The 18 signatory mayors, representing 50 million residents and over $400 billion in pension assets, pledged to take Divest/Invest actions to promote green jobs and a just recovery from COVID-19.

The Divest/Invest Forum develops educational webinars and resources to support cities taking action with their pensions. It also brings together city leaders, pension fund managers, asset managers, investment consultants, and other stakeholders for cities to showcase their experiences with divestment to foster dialogue and debate on the challenges and approaches to shifting towards low carbon, sustainable investments. These convenings help urban leaders make the leap to effective and efficient divestment from fossil fuel companies and accelerate investment in climate solutions.