Four largest managers score poorly on responsible investments
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The majority of asset managers have consistently failed to invest in a way that will protect climate, biodiversity and people, with four of the world’s biggest firms having scored poorly in this area, according to new research.
The four asset managers which received either D or E grades, identified in a report by campaign group ShareAction, are BlackRock, Vanguard, Fidelity Investments and State Street Global Advisors.
The report The Point of No Returns 2023 ranks 77 major asset managers with over $77tn (£64.3tn) of assets under management, from best to worst in a league table, based on five areas: stewardship, climate, biodiversity and social issues.
Only four received a AA or A grade, in ranking order – Robeco, BNP Paribas AM, Aviva Investors and Legal & General Investment Management – “showing that investors can be responsible”.
ShareAction said none received a AAA grade, “indicating that all can still make improvements”.
Two-thirds of the managers surveyed – handling $60tn in assets – scored a CCC rating or worse, indicating “serious gaps in their responsible investment policies and practices for at least one section we analysed”.
Claudia Gray, head of financial sector research at ShareAction, said: “The impact of the decisions these asset managers make cannot be understated. As managers of tens of trillions of dollars, and investors in the biggest companies from many industries, their decisions have a vast impact all over the world.”
Commenting on the ShareAction report, a BlackRock spokesperson said: “The premise of the report does not take into account the fact that our clients invest with BlackRock in pursuit of their long-term financial goals and that, as stewards of their assets, our role is to help them achieve these goals.”
Vanguard, Fidelity Investments and SSGA have been contacted for comment.
European asset managers lead the way on responsible investment
The report also found a huge geographical split between the asset managers.
All the firms in the top 10 were from the EU or the UK, and only six of 39 European asset managers received a grade of D or E. In contrast, more than half of non-European managers (13 of 25 from North America and 8 of 13 from Asia Pacific) received a D or E grade, and none were graded higher than B.
The report praised European firms for doing well on climate issues. On social issues, the best performers were more diverse, but European managers “still outperformed their peers on average”.
On average, British, Dutch and French asset managers show particularly strong performance on stewardship relative to other regions. French asset managers also scored well on social issues. Meanwhile, Swiss and German asset managers show weaker performance on average on biodiversity than the rest of Europe.
The report said: “The European regulatory environment is likely having a positive impact on the responsible investment performance of European asset managers relative to other regions.”
Does the report change how you want to work with your asset managers?
