JP Morgan Asset Management and State Street Global Advisors will leave Climate Action 100+, while BlackRock, the world’s largest asset manager, is downgrading its corporate membership of the climate change pressure group.
This means that the five largest money managers no longer fully back this coalition, which was set up to help co-ordinate stewardship activity from major shareholders, putting pressure on world’s most polluting companies to reduce their carbon emissions.
In a FT report BlackRock said it was pulling out as a corporate member but would transfer its participation to its smaller international arm.
The moves highlight a growing split between the largest US-based asset managers and UK and European managers. Many US-based firms have come under pressure from Republicans over climate issues. Last year BlackRock CEO Larry Fink said the term ‘ESG’ had been “weaponised” in the US and he would no longer be using it.
Climate Action 100+ was widely seen as one of the more influential climate coalitions. It launched in December 2017, to challenge airlines, oil majors and other polluting companies to reduce their carbon footprint.
BlackRock, JPMAM and State Street Global Advisors all joined in 2020. However, Climate Action 100+ announced last year that it would be shifting from pressuring companies on climate disclosures, to pushing them to actively reduce greenhouse gas emissions.
In a statement SSGA said this development on corporate engagement requirements had gone too far. “SSGA has concluded the enhanced Climate Action 100+ phase 2 requirements for signatories are not consistent with our independent approach to proxy voting and portfolio company engagement,” it said in a statement.
BlackRock said in a note that it was dropping its corporate membership because it believes the phase 2 strategy, which takes effect in June, conflicted with US laws requiring money managers to act solely in clients’ long-term economic interest. The $10tn manager is setting up a new stewardship option allowing clients, particularly in Europe, to set decarbonisation as part of their investment objectives.
JPMAM said it had made a “significant investment” in its own stewardship team and corporate engagement: “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.” JPMorgan’s most recent climate change engagement report states that it “does not work in concert with other investors on investment matters and makes its own independent decisions concerning investee companies”.
With $4.1tn and $3.1tn of assets under management respectively, SSGA and JPMAM are also among the top five asset managers.
Vanguard and Fidelity Investments – the other top five global asset managers had not joined Climate100+.
Fidelity International, which operates in the UK and Europe and is active int he UK DC workplace pensions market is a member of Climate 100+.
