“Blue cities and states have much more pension fund money than red states. As the saying goes, money talks. It’s time for Comptroller Lander to put money that he manages where his mouth is. New Yorkers need him to fight for our interests at least as hard as red state politicians fight for the oil and gas corporations.”

New York Communities for Change

Climate activists rallying outside Lander’s office in 2022, calling for the comptroller to divest the city’s funds from BlackRock.

Burning oil, coal and gas is the major cause of climate change. Companies like Exxon make huge profits by cooking our climate. But the Exxons, Chevrons and BPs couldn’t do their dirty work without trillions of dollars of finance from Wall Street firms.

BlackRock is the world’s largest asset manager and investor in fossil fuels. It controls about $10 trillion dollars. It’s often the top shareholder in the world’s largest companies. For example, BlackRock controls 7 percent of ExxonMobil.

Meanwhile, New York City government has instituted major policies to fight climate change. Under former Comptroller Scott Stringer and Mayor Bill de Blasio, the city’s pension funds set into place divestment from oil, gas and coal companies. The city funds, worth about $250 billion, have dumped about $4 billion in fossil fuel holdings.

The city pension funds’ divestment strategy helps protect the planet, our city, and will likely boost the city’s financial returns over the longer term. Yet the city currently funnels about $50 billion worth of its business through BlackRock, the world’s dirtiest big finance entity. Why are the New York City pension funds, managed by Comptroller Brad Lander—a progressive politician —one of BlackRock’s biggest clients? 

Lander, who manages the funds, could shift business away from dirtier managers like BlackRock, and into cleaner managers. That would leverage the city’s huge business with its money management firms and align the city’s divestment strategy with its asset managers.

That’s badly needed. According to the UN Intergovernmental Panel on Climate Change, the world’s consensus scientific assessment, no more new large scale fossil fuel projects can be built if we are to avoid global climate catastrophe.

Meanwhile, BlackRock is Wall Street’s top investor in huge new fossil fuel projects and deforestation of natural places, such as the Amazon rainforest. It’s no wonder that those of us who favor avoiding global catastrophe are pushing BlackRock to stop financing new fossil fuel projects and restrict its funding for deforestation.

In 2020, our groups and other pro-climate forces scored a mini-victory. BlackRock, the world’s biggest pool of capital outside of central banks, announced it would divest a segment of its holdings from part of the coal industry (BlackRock also pledged to vote its enormous shareholdings for prudent climate action). Even though it was a modest move, because BlackRock is massive, their announcement was huge news.

Soon after, powerful right wing forces began their campaign against “ESG” investing. Using their enormous clout in red states, they have induced their client politicians to demand that BlackRock and other Wall Street companies keep pouring capital into fossil fuels.

Oil and gas CEOs know the stakes: if their companies can’t easily raise money from big global finance entities like BlackRock, they’d fade away. That’s a necessary condition for the rest of us to avoid climate catastrophe, but for them, that is their catastrophe.

The pension funds those red states control have put some of their money where their mouths are: they’ve cut a few billion dollars in investments into BlackRock as a warning shot against even very modest climate action. It’s had a massive effect.

Since the red state anti-ESG campaign launched, BlackRock has backslid. It has halted any new restrictions on fossil fuels, voted its enormous shareholdings against climate action, and even put the CEO of the world’s largest oil company, Saudi Aramco, on its board of directors. Other Wall Street financiers have also frozen up on tentative moves towards climate action.

Enter blue city and state pension funds. Since blue places treat workers better, our pension funds are substantially larger: about $2.5 trillion to red states’ roughly $1 trillion. New York City’s funds manage $250 billion alone. That’s a huge pot of money that asset managers like BlackRock profit from. If they see places like New York City begin to counter the red states, they will have to respond.

So far, Comptroller Lander has issued stern press statements and scolded BlackRock with strongly-worded letters and private statements. But since Lander keeps pushing ever-more money to it, BlackRock knows his fine words are empty gestures.

Comptroller Lander is now over two years into his term. As the Comptroller’s office put it in a report a year ago: “As long-term investors with holdings across all sectors of the economy, the pension funds cannot meet net zero goals without alignment with our asset managers.”

He’s right. Yet nothing has happened. In many discussions both before and after that report was issued, we’ve heard of no concrete action or planned action. Now, it’s past time to move forward. New York City won’t counter the red states’ money with rhetoric.

Comptroller Lander should begin to shift the city’s massive business away from BlackRock—and other dirty money managers—and into cleaner companies. 

This past summer saw orange skies, flooding events are accelerating, and it didn’t snow appreciably for over 700 days. The city’s coming scientific assessment of its climate future will reportedly be grim: we can likely look forward to a foot of sea level rise in the 2030s on our more than 500 miles of coastline.

Climate change hits worst in low income communities of color, where people can’t afford to run their A/C 24-7 or relatively easily bounce back from an extreme weather disaster. Another climate change-fueled Superstorm Sandy or Ida could hit anytime.

Blue cities and states have much more pension fund money than red states. As the saying goes, money talks. It’s time for Comptroller Lander to put money that he manages where his mouth is. New Yorkers need him to fight for our interests at least as hard as red state politicians fight for the oil and gas corporations. 

Margaret Perkins is a member of 350NYC.org’s Steering Committee. Pete Sikora is the climate campaigns director for New York Communities for Change.