(The Center Square) – New York City Comptroller Brad Lander is facing criticism for urging city pension funds to cut ties with several major asset managers over what he described as weak progress on environmental, social and governance (ESG) investing.
Lander, who is preparing a run for Congress after losing support from incoming Mayor Zohran Mamdani, said he wants the New York City Employees’ Retirement System, Teachers’ Retirement System and Board of Education Retirement System to drop three managers, including BlackRock. He said the firms have not advanced the ESG priorities he has promoted during his tenure.
“The systemic risk of the climate crisis threatens the long-term value of New York City’s pension funds,” Lander said in a press release. “Our Net Zero plan is a core part of our fiduciary duty to protect these assets. I am pleased to report that 46 of our 49 public markets managers are aligned with our expectations for decarbonization; unfortunately, three are not.”
The announcement listed State Street as an acceptable partner. Lander has been accused of favoring the firm, which has faced national scrutiny from lawmakers and state officials for its ESG activism. His office hired a State Street veteran to help oversee pension investments when he took office, and critics say the renewed endorsement raises questions about political motivations and financial risk.
State Street is also facing pushback as many Republican-led states move to blacklist the firm.
Federal scrutiny increased last week when U.S. Sen. Ted Cruz, R-Texas, introduced legislation aimed at preventing ESG and DEI-based decision-making in federal retirement plans. Cruz questioned whether firms like State Street should continue managing parts of the federal Thrift Savings Plan, which critics say underscores broader concerns about fiduciary standards.
Lander’s proposal prompted immediate backlash from those who say he is putting politics over pension returns.
Commentator Jack Posobiec wrote that Lander is using “the city’s $270 billion pension fund to revive Woke Wall Street by pushing ESG funds like State Street.”
Partnership for New York City CEO Kathryn Wylde called the recommendation “unilateral and incomprehensible.”
“It is our hope that the pragmatic interests of the city and our public pension funds will prevail over political theater under incoming Comptroller Mark Levine,” she said in a statement.
The American Accountability Foundation said Lander is “going full Mamdani” and accused him of hurting retired police officers and firefighters. Meanwhile, the 60 Plus Association said returns “must come before ideology.” Also, the National Taxpayers Union said pension plans “should be focused on delivering returns, not progressive political priorities.”
The Alliance for Prosperity and a Secure Retirement said the development reflects a broader national challenge as pension decisions become increasingly politicized.
“Using pension systems to advance political agendas from either side threatens the stability of workers’ savings,” APSR President Tim Hill recently said.
BlackRock also pushed back.
In a letter to Lander, the firm said his comments were “another instance of the politicization of public pension funds.” BlackRock also said it remains focused on delivering returns for New York City’s 750,000 public workers and retirees.
