The peak global asset management climate change lobby group suffered a quadruple-blow last week as four of the world’s largest fund firms either quit or downgraded membership.
Both the US$3.1 trillion JP Morgan Asset Management (JPMAM), State Street Global Advisors (US$4.1 trillion) and bond giant PIMCO (US$1.9 trillion) left the Climate Action 100+ (CA100+) organisation to pursue independent approaches to the issue.
At the same time, BlackRock transferred its membership of the climate body from the US entity to BlackRock International, which represents only about 40 per cent of the group’s US$10 trillion under management.
According to a Reuters report, the latest CA100+ exodus follows a policy change at the group last year requiring signatories to dial up pressure on ‘laggard’ companies and engage more actively with governments.
State Street spokesperson, Randall Jensen, told the media agency that the new CA100+ rules were “not consistent with our independent approach to proxy voting and portfolio company engagement”.
In a statement, JPMAM told the Financial Times the group would now in-house climate engagement after developing a large internal resource.
“The firm has built a team of 40 dedicated sustainable investing professionals,” a JPMAM spokesperson said. “Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”
In a separate Reuters report, a PIMCO representative said: “…we have concluded that our Climate Action 100+ participation is no longer aligned with PIMCO’s approach to sustainability. PIMCO operates its own portfolio-relevant engagement activities with issuers on sustainability.”
Like State Street, BlackRock cited independence as a factor in side-pocketing its CA100+ duties with the smaller international subsidiary.
“As BlackRock made clear when signing up as a member of CA100+ in 2020, at all times the firm maintains independence acting on behalf of clients, including in choosing which issuers to engage with, and how to vote proxies,” the group said in a release.
Founded in 2017 to focus the combined financial heft of fund manager and asset owner members on the world’s biggest carbon-emitting companies, the organisation still boasts over 700 signatories.
But the exits of JPMAM, State Street and PIMCO – along with the BlackRock downgrade – puts a dent in the total assets under management backing the CA100+ program: the group currently claims a combined signatory fund pool of US$68 trillion.
The latest moves also leave almost half of the world’s top 10 largest fund managers out of the climate action collective given Vanguard and Fidelity (US) – second and third, respectively, by global assets under management – never joined.
Nonetheless, only 13 firms have dropped out of CA100+ since inception, the group says, with 60 new signatories inked from the middle of last year.
The investment influencer group was originally formed under a five-year charter due to expire in 2022 before agreeing on a ‘phase 2’ strategy slated to run until 2030.
Several NZ fund managers and asset owners including Devon, Mint, Pathfinder, BT and the NZ Superannuation Fund are listed as CA100+ members.