Major asset managers falling short of 2050 net zero goals: report

The world’s largest asset managers are falling far short of their commitments to achieve net zero emissions by 2050, according to a new study released by U.K.-based think tank InfluenceMap.

The study published Tuesday found that despite setting ambitious targets through initiatives such as the Net Zero Asset Managers, companies’ climate performance has stagnated or even regressed over the past two years.

The report assessed 45 major global asset managers, which collectively hold US$72 trillion in assets under management, based on three criteria: equity portfolio analysis, stewardship of investee companies, and engagement with sustainable finance policies.

The report revealed that 95% of the asset managers’ equity fund portfolios are misaligned with the goals of the Paris Agreement.

In addition, it found the asset managers collectively hold 2.8 times more equity value in fossil fuel production companies than in green investments.

“The data shows that while they may talk the talk, most asset managers are not walking the walk when it comes to using their influence to drive real change in investee companies and sustainable finance policy,” said Daan Van Acker, FinanceMap’s program manager, in a release.

The study showed a decline in support for climate-positive shareholder resolutions, with the average asset manager backing only 50% of such resolutions in 2022 compared to 61% in the previous year. This was lowest among U.S.-based asset managers, who supported just 36% of climate resolutions.

European asset managers fared better than others in engagement with investee companies on climate, with Legal & General Investment Management, BNP Paribas and UBS leading the way.

In the U.S., however, where several states are experiencing an anti-ESG trend, the report said asset managers “appear to have pulled back even further on their ambition in top-line climate messaging, as well as in their company engagements and resolution voting.”

Moreover, the report revealed that 86% of asset managers in the study are members of industry groups opposing sustainable finance policies that are crucial to achieving decarbonization.

The full results and detailed scores for each asset manager are available on InfluenceMap’s website.

Last month, a report found that Canada’s big banks aren’t addressing climate change quickly enough.

Maddie Johnson

Maddie is a freelance writer and editor who has been reporting for Advisor.ca since 2019.