Israel divestment could put New York City taxpayers at risk for more than $37 billion over a decade, according to a new report released today by ADL (the Anti-Defamation League) and its affiliate, JLens, examining the potential impact of BDS-aligned investment restrictions on the city's pension funds.
The report, titled “The Impact of Israel Divestment on the New York City Pension Funds: Estimating BDS’s Financial Toll on New York City Employees, Retirees and Beneficiaries," was prepared by JLens, with review and input from subject matter experts.
The analysis compared the 10-year historical performance of two hypothetical large-cap US equity portfolios: one broadly diversified, and one excluding 47 major American companies targeted by the Boycott, Divestment, and Sanctions (BDS) movement for doing business in Israel, including Alphabet, Amazon, and Microsoft.
The analysis found an approximately two-percentage-point annualized performance gap, which, when compounded over time, could result in substantial differences in long-term returns. Applying that historical performance gap to the NYC pension funds’ estimated large-cap US public equity allocations over a future 10-year period, the report estimates approximately $37.55 billion in potential forgone value.
"While some in New York, including Mayor Mamdani, have publicly supported the BDS movement, an international campaign aimed at isolating and delegitimizing the world's only Jewish state, this analysis highlights the potentially serious financial consequences of applying BDS-aligned divestment strategies to the city's pension funds," said Jonathan Greenblatt, ADL CEO and National Director. "This research shows that divestment strategies guided by the BDS campaign can be bad fiscal policy, and we believe that they risk contributing to an environment where Jewish New Yorkers are already targeted and marginalized."
The NYC pension analysis builds on JLens' 2024 research on university endowments, which found that a BDS-aligned strategy applied to the 100 largest endowments could result in $33 billion in forgone gains over a decade.
"The BDS movement has migrated from college campuses to city halls as universities have become less hospitable to anti-Israel activism. But the investment math doesn't change with the venue," said Ari Hoffnung, JLens Managing Director, ADL Senior Advisor on Corporate Advocacy, and former NYC Deputy Comptroller. "Our 2024 research showed that BDS-aligned strategies could cost university endowments $33 billion; this analysis shows that if our assumptions prove true they could cost NYC pension funds more than $37 billion. Whether the target is a university endowment or a public pension fund, the financial consequences will be real - and they will fall on the people these institutions serve: from students and faculty to teachers, police officers, and firefighters."
The report's methodology was reviewed by leading legal and financial experts, including Joshua Mitts, the David J. Greenwald Professor of Law at Columbia University.
“The findings are economically intuitive. Excluding a significant share of large-cap companies from a broad, market-cap-weighted index changes a portfolio’s exposure and can affect long-term performance," said Mitts. “The methodology used here is consistent with standard financial practice for evaluating exclusionary strategies. For long-horizon investors such as pension funds, understanding the potential financial implications of such constraints is an important component of portfolio analysis."
The full report details projections for each of the five NYC pension funds, which together constitute the fourth largest public pension system in the US. If the funds, which collectively manage over $300 billion in assets, were to adopt BDS-aligned divestment strategies from 2025 to 2035, the research estimates the following potential losses:
Teachers' Retirement System (TRS): $15.09 billion
New York City Employees' Retirement System (NYCERS): $10.91 billion
Police Pension Fund (POLICE): $7.13 billion
Fire Pension Fund (FIRE): $3.02 billion
Board of Education Retirement System (BERS): $1.41 billion
Total: approximately $37.54 billion
"The BDS movement, many of whose founding goals are antisemitic, seeks to isolate Israel on multiple fronts: diplomatic, financial, professional, academic, and cultural," ADL stressed. "ADL believes the movement's ultimate goal is to delegitimize the Jewish state by maliciously targeting Israel, its institutions, and its supporters, including Jewish individuals and community organizations."