NYCERS Becomes 89th Member of Net-Zero Asset Owner Alliance

Only seven other U.S. institutional investors have joined the group, which aims to align its portfolios to meet the Paris Agreement’s climate targets.

The $89 billion New York City Employees’ Retirement System has become the 89th member of the United Nations-convened Net-Zero Asset Owner Alliance, a group of institutional investors committed to aligning their portfolios to reach the Paris Agreement’s target to reach net zero greenhouse gas emissions by 2050. However, it is only the group’s eighth member from the U.S.

“Climate risk is financial risk, and by joining the Net-Zero Asset Owner Alliance, we reinforce our commitment to sustainable investments that protect our retirees’ futures while pushing for a resilient, net-zero economy,” New York City Comptroller Brad Lander said in a statement.

Members of NZAOA, which together have approximately $9.5 trillion in assets under management, have set targets to reduce portfolio emissions with the goal of lowering global warming to below 1.5 degrees Celsius greater than pre-industrial levels.

According to the UN’s Environment Programme, by joining the group, NYCERS has “recognized a fiduciary duty to mitigate the systemic and company-specific risks that climate change poses to its portfolio.” In doing so, the retirement system has committed to taking steps to reduce its portfolio’s emissions by 2040 toward reaching net zero. According to UNEP, NYCERS can achieve this by “increasing climate solutions investments and engaging with asset managers and portfolio companies.”

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

In UNEP’s recently released fourth progress report, its data show that NZAOA members are so far keeping up their commitments to decarbonize their portfolios with an average reduction of 6% annually. According to the report, 81 members with a combined AUM of $9.4 trillion have set intermediate decarbonization targets, with 79 of those havingsub-portfolio targets. Members targeted a reduction of 26%, on average, by 2025 for bonds, equities, real estate and infrastructure.

Other U.S.-based members of the group include the California Public Employees’ Retirement System, the Jessie Smith Noyes Foundation, the David Rockefeller Fund, the Russell Family Foundation, the United Nations Joint Staff Pension Fund and Wespath Benefits and Investments.