NYC Comptroller and Pension Boards Secure Climate Disclosure Agreements with Major Banks

New York City's Comptroller, alongside trustees of the New York City Employees’ Retirement System, Teachers’ Retirement System, and Board of Education Retirement System (the Pension Systems), has secured agreements with three of North America's largest banks: JPMorgan Chase, Citi, and the Royal Bank of Canada. These agreements commit the banks to regularly disclose their ratio of financing for clean energy supply to financing for fossil fuel extraction, known as the Energy Supply Ratio, along with the underlying methodology.

This milestone agreement comes after extensive shareholder engagements led by Comptroller Lander and the Pension Systems, aiming to shed light on the crucial role banks play in the transition to a low-carbon economy and their alignment with emissions reduction commitments.

Comptroller Brad Lander emphasized the urgency of the situation, stating, “Despite their commitments to decarbonize, U.S. and Canadian banks have financed over $1 trillion of fossil fuel extraction since the Paris Accords. The transition from financing fossil fuels to low-carbon energy is going far too slowly – and thus far, it hasn’t even been possible for shareholders to track."

Henry Garrido, NYCERS Trustee and Executive Director of District Council 37, AFSCME, AFL-CIO, stressed the importance of transparency in capital flows, stating, “For the sake of our planet and our NYCERS members and beneficiaries, pacing and scaling clean energy investments cannot be delayed any longer."

The agreements are aligned with the International Energy Agency's call for reaching net zero greenhouse gas emissions by 2050, requiring a significant increase in global annual clean energy investment by 2030. The Energy Supply Ratio aims to provide investors with decision-useful information to assess banks' transition risks and opportunities, their adherence to net-zero commitments, and the pace and scale of the energy transition.

Ben Cushing, Sierra Club Fossil-Free Finance Campaign Director, hailed the agreements as a crucial step in protecting investors from climate-driven financial risks, while Richard Brooks, Stand.earth Climate Finance Director, underscored the importance of rapid phase-out of fossil fuel funding in line with science- and justice-based principles.

The agreements with JPMorgan Chase, Citi, and Royal Bank of Canada set a new standard for the banking sector, with hopes that other major financial institutions will follow suit. The Pension Systems continue their engagement with Bank of America, Goldman Sachs, and Morgan Stanley, urging them to disclose similar information and align their financing practices with climate goals.

This collaborative effort between New York City's public pension boards and major banks marks a significant stride toward a more sustainable and transparent financial system, setting a precedent for responsible climate finance worldwide.

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