Help us improve in just 2 minutes—share your thoughts in our reader survey.
Three NYC pension plans sued over ESG (2023)
| Environmental, social, and corporate governance |
|---|
|
| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Three New York City pension plans were sued on May 11 by plan members who alleged that the administrators of the plans had caused them economic damage with their ESG practices. Specifically, they alleged that the plans had lost value by selling fossil fuel stocks:
| “ |
In a new attack against ESG investing, three New York City pension funds were sued for allegedly breaching their fiduciary duty by selling billions of dollars of fossil-fuel assets. The plaintiffs, represented by Donald Trump’s former Labor Secretary Eugene Scalia, claim the retirement plans’ decision to divest roughly $4 billion in fossil fuel investments is “a misguided and ineffectual gesture to address climate change,” according to the complaint filed in New York state court. They said the plans have “a duty to act prudently in making investment decisions.” The move to exclude fossil-fuel investments was made in 2021. Then last year, oil and gas stocks soared following Russia’s unprovoked invasion of Ukraine, with the MSCI World Energy Index rising more than 40%. New York City Comptroller Brad Lander, who oversees the pension plans, has been actively pressing asset managers to do more to address climate change. “While we don’t comment on pending litigation, we take our fiduciary duty very seriously,” Lander’s office said in a statement. The vote by trustees to exclude fossil fuels from the three funds was made to protect beneficiaries from “the financial risks of investing in fossil-fuel reserves,” according to the statement. The lawsuit, filed late Thursday, emerges as Republican politicians across the US criticize environmental, social and governance investing. They have launched probes into Wall Street’s ESG efforts and introduced anti-ESG bills, while states including Texas and Florida have restricted business with banks and investment firms that push to address climate change and workforce diversity. The New York City Employees’ Retirement System, the Teachers’ Retirement System and the Board of Education Retirement System violated their obligations when they opted in 2021 to divest fossil-fuel holdings to “advance environmental goals unrelated to the financial health of the plans,” according to the suit. The choice was made without “regard for whether those assets would produce a superior return for the plans.”[1] |
” |
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||||||||||||||
