European asset managers top the chart when it comes to engagement with investee companies on climate. Legal & General Investment Management and the asset management arms of BNP Paribas and UBS all scored within the A grade.
Global market leader (by assets under management), BlackRock, recorded an improvement in its engagement score (B, up from C+ a year ago). This puts it ahead of its next biggest US competitors Vanguard (C), Fidelity Investments (D), and State Street Global Advisors (B-).
The top four US-based companies scored poorly on support for crucial, market guiding climate-related shareholder resolutions in 2020. BlackRock voted in favour of only 24% of such resolutions, Vanguard 21%, Fidelity Investments 23%, while State Street Global Advisors backed 50%.
In Asia, Japanese Sumitomo Mitsui Trust Asset Management scored a B+ on engagement with companies on climate change. Such leadership is needed in Japan, where the TOPIX 1600+ companies remain the most Paris-misaligned of major indexes globally, primarily due to a focus by Japanese power utilities on thermal coal.
The analysis shows that each of these sectors is significantly misaligned with the Paris climate goals. Notably, the world’s automakers are not transitioning to electric vehicles at a fast enough pace, the coal production sector is winding down too slowly, and the power sector is not phasing out fossil fuel generation nor introducing renewables quickly enough.
At a fund level, the portfolio analysis indicates that there are significant differences between individual funds’ alignments depending on their geographical and thematic investment strategy. However, asset managers’ overall portfolios continue to be overweight in companies deploying brown technologies and underweight in those deploying green technologies. Without urgent action, this represents an increased risk of stranded assets.
For further information or to arrange interviews, please contact:
Simon Cullen, Communications Manager, InfluenceMap (London)
simon.cullen( @ )influencemap.org