FILE PHOTO: Zohran Mamdani stands next to New York City Comptroller and mayoral candidate Brad Lander during a watch party for his primary election, which includes his bid to become the Democratic candidate for New York City mayor in the upcoming November 2025 election, in New York City, U.S., June 25, 2025. / REUTERS/David 'Dee' Delgado/File Photo

New York City Comptroller Brad Lander is urging city pension fund officials to re-bid $42.3 billion managed by BlackRock, saying the fund manager has deprioritized climate concerns.

It marks the first major move by a Democratic official to counter pressure on financial companies from Republican allies of the fossil-fuel industry.

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Lander's term ends on Dec. 31. His recommendation, announced Nov. 26, could put Mayor-elect Zohran Mamdani in the hot seat when he takes office in about five weeks. BlackRock has indicated it will seek to keep the business, and Mamdani's appointees to key positions will influence the pension boards that decide where to invest retirement funds for some 800,000 current and former city employees.

In a Nov. 25 memo to other pension fund trustees, seen by Reuters, Lander urged the funds to re-evaluate contracts with New York-based BlackRock, the world's largest asset manager and also the city's largest manager of retirement assets.

Lander cited what he called "BlackRock's restrictive approach to engagement" with about 2,800 U.S. companies in which it owns more than 5% of shares.

'ABDICATION OF FINANCIAL DUTY'

Under pressure from President Donald Trump's administration, BlackRock in February said it would not use its discussions with executives to try to control companies. Lander and other environmentally minded investors have urged fund managers to press executives on priorities like disclosing emissions.

In an interview, Lander said the change was "an abdication of financial duty and renders them unable to meet our expectations for responsible investing."

His recommendation must still be approved by pension boards that traditionally take cues from the comptroller's office. Representatives for Mamdani did not respond to questions. A representative for Lander's elected successor, Mark Levine, said he will review the recommendations.

Lander, a rival-turned-ally of Mamdani during the mayoral campaign, recommended that the pension plans keep BlackRock to manage non-U.S. equity index mandates and other products. In the interview, Lander said he is "seriously considering" a run for Congress next year, confirming earlier reports, but said his recommendation on BlackRock has nothing to do with his plans.

A letter to Lander from Armando Senra, BlackRock's head of the Americas institutional business, said the comptroller's claims that BlackRock has abdicated its financial duty and put pensions at risk from climate change "are another instance of the politicization of public pension funds, which undermines the retirement security of hardworking New Yorkers."

In the letter provided to Reuters by a BlackRock spokesman, Senra said if pension officials take up Lander's recommendation, "we look forward to demonstrating the breadth and depth of our capabilities and the tremendous value we deliver" to the city and its public servants.

Closing his letter to Lander, Senra wrote that "BlackRock was founded in New York City, and we are proud to call it our home. We look forward to continuing to serve ... the city’s pensions as you pursue your next career opportunity."

Separately, Lander recommended the three pension systems continue using State Street to manage $8 billion in equity index assets. In addition to BlackRock, he recommended dropping deals with Fidelity Investments and PanAgora, which he said do not press companies sufficiently on environmental matters.

A Fidelity representative declined to comment. The other fund managers did not immediately comment.

PRESSURE FROM WASHINGTON 

A number of Republicans, some from fossil-fuel-producing states, have withdrawn money from BlackRock and other money managers, accusing them of basing investment decisions on social or environmental issues. New York City's would be the first large U.S. pension funds to take a similar action from the Democratic perspective.

Lander noted that his review showed 46 of 49 fund managers for the city have plans that meet his expectations for pushing corporations to decarbonize. 

Richard Brooks, climate finance program director for the environmental advocacy group Stand.earth, via e-mail on Wednesday praised Lander's plan to drop BlackRock. "Now, it is critical that the pension trustees, including the mayor's appointees, turn the recommendation into real action," Brooks said.