Comptroller Candidate Brad Lander Releases A Strategic Plan for Responsible Fiduciary Investing
Lander convenes “Responsible Investment Advisory Group” to advise his campaign & prospective transition team
NEW YORK – Comptroller candidate Brad Lander is announcing today a strategic plan for responsible fiduciary investing that takes a proactive approach to working with pension fund trustees, as well as the public sector workers and retirees they represent, in the process of maximizing risk-adjusted market returns while remaining attentive to the fund-level and systematic risks posed by dangers including climate change and inequality. The proposal is available here.
Lander has also convened a diverse group of leading experts and practitioners to advise his campaign and prospective transition team on issues including asset and portfolio management, environmental, social, and governance (ESG) investing, and corporate governance. Lander’s “Responsible Investment Advisory Group” includes Keith Mestrich, recently retired President & CEO of the union Amalgamated Bank, Carlos Naudon, president of Ponce de Leon Federal Bank, economist Lenore Palladino, former Deputy Comptroller for Asset Management Jon Lukomnik who recently authored Moving Beyond Modern Portfolio Theory, Angela Matheny, a leader in asset management diversity, and half a dozen others. Full list of members included below.
“The job of the Comptroller is to take the long-term view on our city and invest in a more equitable and sustainable future, for public sector retirees and their families and neighborhoods. The City’s pension funds belong to the workers who earned them -- that’s why it is critical to include them in a proactive strategy for ensuring that investments secure a better future for them and their communities,” said Brad Lander, candidate for NYC Comptroller. “By investing strategically for the long-term, mindful of both fund-level risks which can be addressed through diversification, as well as the systemic risks posed by climate change, inequality, and racial injustice, we can guarantee retirement security for our public sector retirees, and build an economy and a future for all of us.”
The City’s pension funds are among the largest in the country (collectively worth $248 billion as of January 2021), which affords them power and potential to influence today’s capital markets, and by extension, the broader economy. Representing these workers and community-members, Lander believes the public pension funds have the responsibility and potential, consistent with their fiduciary duties, to lead efforts for transformational change in our financial system. Leading economists, investors, and analysts -- including many of the members of Lander’s advisory group -- increasingly recognize that serving as a fiduciary for these funds must include strong attention to those core systemic risks, including the climate crisis, rampant inequality, and racial injustice. Only by actively working to address these broader risks can asset managers genuinely help to provide a more stable long-term future for those they serve as fiduciary.
Working together with the pension fund trustees, Lander will undertake an inclusive and proactive process to produce a Strategic Plan for Responsible Fiduciary Investing, to be reviewed once every two years. Trustees will work with their members to engage other stakeholders including workers and consumers of companies that the pension funds are invested in, investors, businesspeople, issue activists, and community leaders.
Through this strategic planning process, each fund will develop a fiduciary blueprint, which would be finalized and adopted by its trustees. These blueprints would then be utilized by the Comptroller’s Bureau of Asset Management in its investment research and advice to the funds, and also as a platform for working with other ESG investors on coordinated strategies.
Key areas that the process will focus on include:
Holding corporations and fund managers accountable for corporate governance practices that are consistent with stronger long-term investment returns; including compliance with the Paris Climate Agreement, workers rights, wages, and safety; encouraging worker representation on corporate boards, restricting stock buybacks, and boardroom diversity;
Divesting from activities that expose the funds to long-term risk where satisfactory changes cannot be made through shareholder action; including aggressively shepherding fossil fuel divestment, continuing to avoid private prisons and gun-manufacturers, and reviewing the funds’ positions with risky and speculative assets including hedge funds, private equity, and private real estate funds;
Focusing Economically Targeted Investments (ETIs) in construction and preservation of affordable housing, financing a green economy, and providing start-up capital to MWBE and Black- and Brown-owned businesses;
Increasing the diversity of the funds’ asset managers and advisers, and other strategies for addressing the cycle of racial wealth and income inequality; access to capital and wealth-building for historically marginalized groups, and prioritizing investment in communities for long-term innovation and productivity.
As Comptroller, Lander will lead a team to maximize risk-adjusted market returns through responsible fiduciary investing, bringing an equity and sustainability lens to the portfolio, and securing long-term sustainable growth – to guarantee retirement security for our city’s teachers, firefighters, nurses, and payroll administrators, along with a better future for their families and neighborhoods.
Lander’s “Responsible Investment Advisory Group” includes (affiliations listed for identification purposes only):
Vonda Brunsting, Program Manager, Institute for Responsible Investment, Harvard Kennedy School (fmr. SEIU Capital Stewardship)
Sean Campbell, Founder, Capital for Communities (fmr. Macquarie Group, Marathon Asset Management, D.E. Shaw & Co.)
Demetric Duckett, Managing Director, Capital for the New Majority, Living Cities
Eric Horvath, Director of Capital Strategies, Common Future
Jon Lukomnik, Sinclair Capital, author of Moving Beyond Modern Portfolio Theory (fmr. NYC Deputy Comptroller for Asset Management)
Angela Matheny, Director of Investment Staff & Diverse Manager Equity at Crewcial Partners
Keith Mestrich, retired President & CEO of Amalgamated Bank
Carlos Naudon, President, Ponce de Leon Federal Bank
Lenore Palladino, Assistant Professor of Economics and Public Policy, UMass Amherst, Fellow at Roosevelt Institute
Delilah Rothenberg, Founder and Executive Director, Predistribution Initiative
Robin Varghese, Associate Director, Knowledge and Innovation, Economic Justice Program, Open Society Foundations
"New York City’s pension funds have a long, proud history of understanding how to invest both wisely and well. The City was one of the three co-founders of the Council of Institutional Investors 35 years ago to protect pension beneficiaries from raiders. More recently, the Boardroom Accountability Project has improved corporate governance while fighting climate change and gender discrimination – all while creating an excess return for the City,” said Jon Lukomnik, Sinclair Capital, author of Moving Beyond Modern Portfolio Theory (fmr. NYC Deputy Comptroller for Asset Management).
“New York City’s public pension funds have the responsibility and potential, consistent with their fiduciary duties, to lead necessary efforts for transformational change in our financial system. By holding corporations and fund managers accountable for inequitable corporate governance practices and focusing on long-term value rather than short-term speculation, the NYC Comptroller can play a critical role in moving towards a more sustainable and just economy,” said Lenore Palladino, Assistant Professor of Economics and Public Policy, UMass Amherst, Fellow at Roosevelt Institute. “Brad understands that serving as a fiduciary must include active leadership to take on the systemic risks facing the pension fund portfolio and our economy as a whole.”
“When BIPOC hold capital and the power of decision, we often make different, more enlightened decisions than our white counterparts -- decisions that can narrow racial wealth disparities, generate maximum returns, and insure a more flourishing economy for all,” said Demetric Duckett, Managing Director, Capital for the New Majority, Living Cities. “That is why we must increase investment in BIPOC fund managers and founders of color. New York City’s pension funds have an opportunity and a responsibility to help lead the way.”
More details on the plan are available at: landerfornyc.com/responsible-investing.