NYC urges smaller pension funds to follow its lead on ESG in real estate

Trustees for the New York City Pension Funds urged institutional investors around the country to take up policies that pressure real estate and infrastructure managers to pay more attention to ESG concerns like worker safety, wages and benefits, in a discussion at the Council of Institutional Investors’ spring conference in Washington, D.C., on March 12.

The city’s five pension funds, which collectively manage $193.5bn in assets, adopted responsible contractor policies (RCP) in May and June of 2017, and trustee representatives Susannah Vickers and David Katzman said that the policies provide a good pressure point for engaging managers on environmental, social and governance concerns.

Vickers, who is the Executive Director for Pensions at NYC’s Bureau of Asset Management, as well as the NYC Comptroller’s representative on four of the five pension boards, said that the city has invested in six or seven real estate projects since the policies went into effect. None of the managers had any problems agreeing to the city’s wage, safety, and benefits policies, she said.

“Many of the big managers are relying more and more on institutional investors to raise these huge funds, to do the mega deals that they’re doing in private real estate, private infrastructure, private equity,” Vickers said. “They really need us as clients, and I think it’s harder for them to put the deals together that they want to do and be the big players that they want to be without institutional dollars. So when we create a policy, they sort of have to listen.”

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Published by Money Management Report/Pageant Media.