Asset managers still failing to align with Paris goals

20th January 2021

Istock 1136407887

Related Topics

Related tags

  • Fossil fuels ,
  • Finance ,
  • Global ,
  • Investment


Mark Jones

The world's largest asset managers are still failing to align with the goals of the Paris Agreement due to their investments in the automotive, fossil fuel production, and electric power sectors.

That is according to a recent report from the think tank InfluenceMap, which shows that portfolio equity holdings of the 30 largest asset managers are between 8% and 27% deviated from a Paris-aligned target.

They are invested in companies that are failing to embrace green technologies at a sufficient pace, with more than $20trn (£15trn) in market value now active in sectors that risk stranded assets.

Efforts to accelerate the transition of these companies through engagement and shareholder resolutions by large asset managers remain mixed, with US mangers continuing to lag behind their smaller European peers.

“Given the huge influence these asset managers have over the global economy, it is vital they take action to ensure the world can meet the climate goals of the Paris Agreement,” said Dylan Tanner, executive director of InfluenceMap.

“However, this latest report shows most asset managers are still moving too slowly when it comes to using their clout to drive change in investee companies.”

The report shows that the most robust engagement with companies continues to be from the European giants BNP Paribas Asset Management, Legal & General Investment Management, and UBS Asset Management.

When it comes to resolution voting, the research shows that overall support for climate-relevant resolutions increased during the 2020 proxy voting season compared to 2018 and 2019 levels.

However, big US players, such as BlackRock, Vanguard, Capital Group, and Fidelity Investments, still declined support for 75% or more of climate-relevant resolutions.

While this represents a slight improvement over 2018/19, they lag top scorers, namely the asset management arms of AXA, BNP Paribas, Legal & General, Aviva, and Allianz, all of whom supported 80% or more.

“This report highlights the need for giant US asset managers to step up and take stronger action – especially given their market dominance and unique ability to send a clear signal to the rest of the economy,” Tanner continued.

“In addition, even for those asset managers who lead on stewardship, the ultimate test will be real-world improvements on climate change by problematic companies. This needs to be demonstrated sooner rather than later if high climate-risk companies are to remain in portfolios.”

Image credit: iStock


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

IEMA reviews political party manifestos

Ahead of the UK general election next month, IEMA has analysed the Labour, Conservative, Liberal Democrat, and Green Party manifestos in relation to the sustainability agenda.

19th June 2024

Read more

Disinformation about the impossibility of averting the climate crisis is part of an alarming turn in denialist tactics, writes David Burrows

6th June 2024

Read more

Rivers and waterways across England and Wales are increasingly polluted by sewage spills. What is causing the crisis and what is being done to tackle it? Huw Morris reports

31st May 2024

Read more

IEMA submits response to the Future Homes Standard consultation

31st May 2024

Read more

In January, the Welsh government consulted on a proposed white paper, 'Securing a Sustainable Future: Environmental Principles, Governance and Biodiversity Targets for a Greener Wales'.

31st May 2024

Read more

Gillian Gibson calls for urgent action to avoid environmental tipping points

20th May 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close