Opinion: NYU should be more transparent about its investments

Three out of five of the New York City Comptroller pension funds have divested from the fossil fuel industry. It’s not perfect, but at least it’s honest. NYU should follow their lead.


Lauren Sanchez

(Lauren Sanchez for WSN)

Clara Scholl, Arts Editor

From 2040 Now to RA-hosted events, NYU’s sustainability efforts have come to the forefront of university news recently. When it comes to climate change, the university has no shortage of environmentally conscious activities planned. However, transparency about its endowment investments is an issue not even 2040 Now can resolve. If NYU really wants to be sustainable and straightforward, it should look to cities and public institutions as an example. 

Within New York City, the Office of the New York City Comptroller recently created the NYC Climate Dashboard, where it publishes its climate data and sustainability plans. One doesn’t typically associate New York City’s fiscal budget with Earth Day, but according to Louise Yeung and Steve Fox — members of Comptroller Brad Lander’s sustainability team — the two are inextricably tied.

If surprising, the comptroller’s office serves as a notable example of investment transparency. Yeung is the comptroller’s chief climate officer, and Fox is the strategic organizer for climate and environmental justice. Both work within the office of the comptroller to ensure that New York City’s government uses its tax money effectively.

“We manage investments while addressing long-term risks and opportunities for the pension portfolio,” Yeung said. “Part of those risks and opportunities is the risk that climate change poses with increasing wildfires, storms, hurricanes, flooding and other climate disasters.”

Keeping the long-term pension returns in mind, the comptroller’s office decided to divest, or remove, up to $3 billion from fossil fuel reserves in 2018. Three out of five of the funds — the New York City Employees’ Retirement System, the Teachers’ Retirement System and the Board of Education Retirement System — voted in favor of divesting. 

The decision to divest was motivated by the office’s obligation to protect its pension portfolio and manage risks associated with climate change, rather than by politics. Investing in climate change solutions not only prevents additional costs from climate disasters, but also provides opportunities for growth and innovation in areas such as renewable energy, energy efficiency and sustainable infrastructure.

“The decision was made in thinking about some of the longer term risks that fossil fuel reserves pose to our pension investments,” Yeung said. “When we’re talking about divestment, these are companies for which the majority of their profits are derived from owning fossil fuel reserves, and that is just fundamentally at odds with our investment approach.”

The comptroller’s office engages with companies such as Bank of America, Goldman Sachs, JPMorgan Chase and Royal Bank of Canada — pushing them to stop funding new fossil fuel expansion projects and set clearer emissions targets.

NYU should take a page out of their book and be vocal about helping businesses embrace more sustainable practices, and create positive change by investing in climate solutions. This is especially important for businesses with large carbon footprints or those wholly dependent on the fossil fuel industry. NYU can assist in reducing the risks brought on by climate change, safeguard its pension portfolio, and advance a more sustainable future by interacting with these businesses and promoting reform.

The comptroller’s office plans to be fully net zero in its investments by 2040 and increase their investments in climate change solutions to $19 billion by 2035. NYU’s plan to achieve carbon neutrality by 2040 mirrors the city’s, but the university is missing one key piece — transparency. 

Last year, Lander wrote a letter to Laurence Fink, the CEO of major investing firm BlackRock, pushing Fink to divest the billions BlackRock holds in coal and oil. Fink is also currently a vice chair of NYU’s board of trustees. The comptroller’s office has not divested from BlackRock, despite its investments in fossil fuel. Still, unlike NYU, the office has directly expressed their disagreements with these investments.

“We’re trying to address the need to adopt science-based targets to support the emission reductions economy-wide,” Fink said. “Beyond BlackRock, we also need to get our entire finance sector to come together internationally to meet the challenge of decarbonization in our entire world’s economy.”

While this is a lovely sentiment, it is difficult to feel that Fink and the board of trustees are putting actions behind their words without a real understanding of where NYU stands when it comes to their endowment investment. As the university’s investment office is notoriously difficult to speak with — I emailed three times, and received no response — it is unclear what NYU’s investments actually are.

Given NYU’s position as a prominent institution with significant financial resources, investing in climate action would demonstrate leadership and contribute to sustainability efforts. Through transparent investing in renewable energy and other climate solutions, NYU could support the transition to a low-carbon economy, generate long-term financial returns and provide the NYU community with complete, truthful information.

“It is long- term work, and it’s very easy to get discouraged over such a long campaign,” Fox said. “When it comes to organizing for real, meaningful change, the biggest thing is persistence. It’s hard work, but it’s meaningful work.”

If NYU is hoping to be climate neutral by 2040, it should also hold itself accountable through investment transparency. Efforts to reduce the university’s carbon footprint and increase the use of renewable energy sources would not only contribute to the city’s broader goals of reducing emissions and promoting sustainability, but would also foster trust and more open communication within the NYU community. New York City’s initiatives aren’t perfect, but at the very least, they are straightforward.

WSN’s Opinion section strives to publish ideas worth discussing. The views presented in the Opinion section are solely the views of the writer.

Contact Clara Scholl at [email protected].