New York City’s pension funds reported that asset managers BlackRock and Fidelity remain “insufficiently aligned” with their net zero expectations, a situation that could lead the public pension system, one of the largest in the U.S., to re-bid or terminate their mandates.

New York City’s pension funds represent nearly $300 billion in assets – making them collectively one of the largest pubic 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 goal to achieve net zero emissions by 2040, and a requirement for asset manager to submit net zero plans in 2025.

The new assessment, included within the NYC pension funds’ Fiscal Year 2025 Annual Climate Reports, follows a recommendation last year by former NYC Comptroller Brad Lander 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.

Earlier in 2025, 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.

Lander’s 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 he said had led BlackRock and Fidelity to take more restrictive approaches on engagement and proxy voting than other large asset managers.

At the time, BlackRock called the Comptroller’s statements “another instance of the politicization of public pension funds, which undermines the retirement security of hardworking New Yorkers.”

In the new report, the pension systems reported that Pangora has strengthened its approach to better align with expectations, but that BlackRock and Fidelity “are still assessed as insufficiently aligned.”

The new reports also highlighted the progress made by the pensions funds towards their climate goals, revealing that the city’s public pension systems have cut their portfolio greenhouse gas emissions footprint by nearly half by the end of fiscal year 2025, putting the funds well ahead of their interim targets towards their 2040 net zero goals.

The Comptroller’s office revealed a 48.13% weighted average reduction in Scope 1 and 2 financed greenhouse gas emissions for the 3 pension systems, with TRS, NYCERS and BERS achieving a total reduction of Scopes 1 and 2 financed emissions intensity in their public equity and corporate bonds portfolios of 49%, 46.68% and 45.72% respectively, since the end of 2019, beating their respective goals of 32%, 32% and 22% by 2025.

The Comptroller also noted that the public pension systems saw a 10.3% net return in 2025, while achieving the decarbonization results.

NYC Comptroller Mark Levine said:

“The climate crisis has a direct impact on our global economy, and our pension systems are doing the hard work of protecting retirees while advancing a transition to a low-carbon economy. The progress laid out in this report is a reflection of the important role that reducing emissions exposure, investing in the clean energy transition, and holding companies accountable plays in smart pension management.”