New York Court to Hear Lawsuit Challenging Climate Risk Considerations by Investment Managers for Pension Funds

A New York court may be the first to consider a legal claim by critics of investment managers who account for climate risk. The lawsuit, filed by four New York City employees and the conservative nonprofit Americans for Fair Treatment, alleges that former Mayor Bill de Blasio’s decision to remove public pension funds from fossil fuel investments could put their retirement at risk. It argues that asset managers breached their fiduciary duties by including climate-related risks in their assessment of energy companies’ financial liability. The case could potentially lead to litigation. If successful, this could open up a new legal claim for critics of ESG investing. The pension funds, the New York city Employees’ Retirement System, the Teachers’ retirement System of the City of New York and the New City Board of Education Retirement System have urged the lawsuit be dismissed.