In the past few months, some of the largest banks and asset managers in the United States have quit net zero networks, the climate groups that encourage their members to set ambitious carbon reduction targets and collaborate internationally on sustainability efforts.

But the week after Donald J. Trump won re-election in November, NYCERS, a pension fund for New York City employees, went in the opposite direction. It joined a United Nations-affiliated climate action group for long-term investors, the Net Zero Asset Owner Alliance.

The timing wasn’t intentional, said Brad Lander, the comptroller who oversees the city’s finances, including the pension fund, and is now running for mayor. But, he added, “we were pleased that the timing sent an important signal.”

“It is far more important than it was for pension funds and other big asset owners to take collective action at this moment,” Mr. Lander said.

At a time of growing backlash to environmental, social and governance goals and investment strategies, pension funds, particularly in blue states and Europe, have emerged as a bulwark against efforts to sideline climate-related risks.

The funds, which sit at the top of the investment chain, have stepped up engagement with asset managers and companies on climate goals and have kept public commitments to use their fiscal might to reduce carbon emissions. In some cases, that has meant shifting to European asset managers, which have not backed off on climate commitments as much as their American counterparts have.

Mr. Lander’s office oversees investments for five public pension funds for 700,000 of the city’s current and former employees. The funds are pushing ahead with engagement, bringing more shareholder resolutions to banks to disclose the ratio of their fossil fuel investments versus clean energy and to utilities companies on their climate targets.

They have been emboldened by a court decision earlier this month that upheld a dismissal of a lawsuit against three of the funds for divesting from some fossil fuel investments.

Mr. Lander and other pension fund managers say they aren’t motivated by political beliefs or a purely environmental agenda. Instead, their investments, which need to provide long-term sustainable returns for people who might not retire for many decades, keep climate risks at the forefront of their minds.

The net zero alliance is “the opposite” of an activist, Peter Stensgaard Morch, the chief executive of PensionDanmark and a member of the alliance’s steering group, said in a written response to questions. Its work is driven by the fiduciary duty of its members to seek the highest possible returns, he added.

Recent actions by pension funds stand in contrast with those of other institutions that are loosening their climate commitments. A net zero group for banks is considering dropping the pledge to align banks’ portfolios with a goal of limiting global warming to 1.5 degrees Celsius. Some big energy companies, such as BP, have pared back their renewable investments. Last month, the European Commission proposed relaxing climate reporting rules for companies, citing concerns that the regulation was too onerous and would impede economic growth.

The U.N. asset owner group, which includes pension funds, insurers, foundations and other long-term investors, has fared better than its counterparts. Asset managers, who are in a tug of war between customers in blue and red states, have pulled out of previous public commitments to climate goals. The U.N. group for asset managers, which used to include BlackRock, has suspended its activities, and the group for banks lost 17 big members in the past four months.

Intense political and legal attacks in the United States, notably from red states with anti-E.S.G. laws, have pressured asset managers to abandon climate action groups and simultaneously widened the chasm between Europe and the United States on sustainability efforts.

The People’s Pension, a British fund that has about £32 billion ($41 billion) in assets and manages pensions for nearly seven million people, recently shifted most of its assets away from State Street, the U.S. firm that was its only asset manager, to Amundi, a French company, and Invesco. The fund was seeking more asset managers with strong sustainability credentials in line with its own responsible investment commitments, said Dan Mikulskis, the chief investment officer.

“We don’t interact directly with companies,” Mr. Mikulskis said. “We rely on asset managers to do that for us.”

During the search, which lasted about a year, asset managers started to go “different ways” from one another, as he diplomatically put it. But that made it easier to determine those with the right approach for his fund.

Recently, a group of 27 pension funds, mostly from Europe, called on asset managers globally to improve their stewardship practices to address climate change risks and to stay in collaborative groups. They noted there had been a “divergence” between the expectations of asset owners and the actions of asset managers on climate stewardship.

This was backed up by a study by Principles for Responsible Investment, which found that among its 3,000 or so signatories, asset owners were much more likely to take a long-term approach to identifying climate risk and to use climate scenario analysis than the asset managers to whom they outsourced investing.

Progress by some companies on climate action is slowing amid short-term pressure, such as a rise in energy prices, said Diandra Soobiah, the head of responsible investment at Nest, a British state-backed pension fund with £48 billion ($62 billion) in assets.

“These pressures have had an impact, but what we are trying to do as long-term investors is really talk about the importance in managing these long-term risks,” she said. “We still believe the world is going to have to transition, and want them to be prepared.”

IN CASE YOU MISSED IT

Elon Musk said he sold X to his A.I. start-up xAI. In an all-stock deal that shows how parts of Musk’s business empire can intertwine, xAI was valued at $80 billion and X was valued at $33 billion, which is $11 billion less than Musk paid for the company when he acquired it in 2022.

Resurgent inflation data sent markets tumbling. The closely watched Personal Consumption Expenditures report showed that inflation rose last month above Wall Street forecasts, driven by a surge in the prices of everyday items. Economists warn that President Trump’s trade war and his crackdown on immigration could accelerate inflation further. The report sent stocks sharply lower, with the S&P 500 on pace for its first losing quarter since 2023.

Trump unveiled new tariffs and vowed that more would go into effect next week. The latest — duties of 25 percent on the imports of cars and auto parts — were widely expected but still caught auto company executives, global leaders and investors off guard. That set off a diplomatic scramble with, the European Union reportedly identifying possible concessions ahead of negotiations to ward off the worst, according to Bloomberg. In addition, Trump and Prime Minister Mark Carney of Canada held what the president called “very productive” talks yesterday.

Major law firms pushed back against Trump. Federal judges issued temporary restraining orders on Friday blocking executive orders that essentially bar WilmerHale and Jenner & Block from working with the federal government or even entering federal buildings. (A third law firm, Perkins Coie, sued earlier on similar grounds.) Trump’s attacks on Big Law have rocked the sector, with firms facing a dilemma: try to cut a pre-emptive deal with Trump or risk losing clients and having their partners poached by rival firms.

Philanthropy is under pressure

As the Trump administration slashes its way through Washington, nonprofit organizations are bracing for a big hit.

The federal government contributes about $303 billion a year to more than 100,000 U.S. nonprofit groups, ranging from neighborhood community projects to overseas aid, according to Candid, a research data organization that tracks the sector.

Many of those grants are now at risk from deep cuts at the United States Agency for International Development, the National Institutes of Health, and other federal agencies, as Trump and DOGE work to slash spending and end support for issues like climate action and diversity. Elon Musk this month called nonprofits “a giant graft machine.”

For weeks, nonprofits have wrestled in boardrooms and over Zoom with how best to maintain operations. The most obvious solution is to ask private donors and foundations to step up their giving — but those patrons can only do so much.

“Filling the gaps would be impossible,” Rick Cohen, chief operations officer for the National Council of Nonprofits in Washington, told DealBook. He estimates 30 percent of nonprofit revenues come from government contracts.

So what now?

Some philanthropy giants have increased their giving in response to Trump cuts. The MacArthur Foundation, whose $8.6 billion in assets supports programs in the arts, the environment and other areas, announced increases in grant spending for at least two years. Michael Bloomberg, founder of Bloomberg Philanthropies, said the organization would make up the funding shortfall in climate projects, as it did during Trump’s first presidency.

But foundations, which now give nonprofits about $107 billion a year, according to Candid, cannot fully compensate for government cuts. And trying to do so could be seen as “surrender in advance,” Matthew Bishop, the author of “Philanthrocapitalism,” told DealBook.

Increasing private gifts risks creating an illusion of stability. Some nonprofit organizations and philanthropy experts told DealBook that they worry that donors could mistakenly convey to the public and the Trump administration that nonprofits can survive without government help.

“We cannot in any way create the conditions for the argument of ‘Send it all in our direction,’” said Jeff Moore, the chief strategy officer for Independent Sector, a coalition of U.S. corporate and nonprofit philanthropies in Washington. “There is not enough money in the philanthropic universe to do what the federal government does.”

Nonprofits are scrambling for funds. Even where federal grant programs remain in place, DOGE firings have hollowed out the offices that process grants, hugely complicating the work of nonprofits. “There’s nobody there to send their application for funding to,” Cohen said.

At the same time, donors outside the federal government are being bombarded with appeals for help. Laetitia Cairoli, the director of development for Oasis Haven for Women and Children in Paterson, N.J., says she has looked to replace $500,000 in federal grants it expects to lose, but she has been told by New Jersey officials and private donors that they’re overwhelmed with requests. “They are seeing increased pressure on the funds,” she told DealBook.

Some private funding may also be in jeopardy. Executives have grown increasingly wary of even tangential politics, including which programs their companies support.

The Howard Hughes Medical Institute canceled a $60 million program for student diversity in science and medical education. The Chan Zuckerberg Initiative, Mark Zuckerberg’s for-profit philanthropy, scrapped funding for diversity and immigration-reform programs, citing “the shifting regulatory and legal landscape.” And this month, the Gates Foundation made sweeping cuts to its climate program, Breakthrough Energy, as Bill Gates works to repair his fractious relationship with Trump.

“There has been a big backing away from anything that could be seen as woke,” Bishop said. Even funding gay pride marches or local libraries could now be deemed too risky. “Companies don’t want to bring attention to themselves,” he said.

The looming tax battle could hit hard. As Congress tries to pass a budget bill this year, nonprofits’ tax status looks set to be a fraught issue, with philanthropic organizations arguing for a universal charitable deduction, allowing those who take a standard deduction on their tax returns to still write off donations, while the administration seeks to scrub projects considered political. Losing tax-exempt status is nonprofits’ worst fear. “That could cost them millions and millions of dollars,” Bishop said.

Nonprofits are in triage mode. Tweaking operations, as nonprofits did during Trump’s first term and the pandemic, is no longer enough. “The cuts are so broad and so deep, food banks cannot get the food they were promised,” said Cohen. His organization, the National Council of Nonprofits, which represents 30,000 nonprofits and donors, was part of a lawsuit that won a temporary injunction in January against Trump’s blanket federal funding freeze. The final outcome of that challenge has yet to be determined.

For now, organizations are most likely to do triage, salvaging what they can, as they winnow down operations. “Figuring out which programs you really need to survive is an important strategic question,” Bishop said. “It’s necessary to be ruthless in cutting free those you don’t feel are essential and doubling down on those that are right.”

Thanks for reading! We’ll see you Monday.

We’d like your feedback. Please email thoughts and suggestions to [email protected].