LGIM is the highest ranking asset manager in a meta study of industry metrics of actions taken by institutional investors on ESG and climate change, with Vanguard achieving low scores.
This new meta-study was conducted by Corporate Adviser Insight as part of its latest ESG In DC Pensions report. Click here to request the 72-page report.
| ShareAction ‘Point of No Returns’ report
|
MajorityAction: Climate In the Boardroom report
Number of votes in support of Climate100+ 12 key climate-critical resolutions with companies in the energy, motor and airline industries |
UNPRI – Leaders Group 2020 Top 20 asset managers that excel at climate reporting | Morningstar: survey of fund management houses with highest sustainability ratings | |
| Aberdeen Standard Investments | Not covered in report | N | 16 | |
| AllianceBernstein | Not covered in report | N | 13 | |
| Amundi | 3 out of 4 | N | 83 | |
| Aviva | Top 10 | Not covered in report | N | 15 |
| BlackRock | 2 out of 12 | N | 20 | |
| BNY Mellon/ Newton | Bottom 10 – Mellon Investments Corporate | 7 out of 12 | N | 19 |
| Columbia Threadneedle | Not covered in report | N | 16 | |
| Fidelity Investments | Bottom 10 – Fidelity Investments* | 0 out of 12 | N | – |
| Impax Asset Management | Not covered in report | N | 1 | |
| JP Morgan Asset Management | Bottom 10 | 8 out of 12 | N | 39 |
| AEGON ASSET MANAGEMENT | Top 10 | Not covered in report | N | 0 |
| Legal & General Investors | Top 10 | 12 out of 12 | In top 20 list | 3 |
| Nomura | Not covered in report | N | 21 | |
| PIMCO | 12 out of 12 | N | 0 | |
| Royal London | Not covered in report | N | 4 | |
| Schroders | Top 10 | Not covered in report | N | 20 |
| State Street Global Advisors | 3 out of 12 | In top 20 list | 20 | |
| T.Rowe Price | Not covered in report | N | 2 | |
| UBS | Not covered in report | N | 54 | |
| Vanguard | Bottom 10 | 0 out of 12 | N | 8 |
| Wellington | Not covered in report | N | 2 |
While LGIM scored highly across the different studies examined, other large asset managers including Vanguard and BlackRock received far lower ratings across these data sets.
Corporate Adviser’s report also found LGIM and Schroders were the only two asset managers in the UK DC universe to have committed to clearly decarbonisation targets through the Net Zero Asset Managers Initiative. None of the other asset managers providing information for this report were members of this influential body.
This meta study looked at four major studies on sustainability and responsible investment in an attempt to give an overview of which fund management houses are leading the way on these issues, and which are lagging behind.
These studies include: ShareAction’s Point of No Returns report, Majority Action’s Climate in the boardroom report, the UNPRI Leaders Group 2020 data plus Morningstar’s fund management sustainability ratings.
ShareAction rates individual fund managers, and for this meta-study Corporate Adviser highlighted which of those managers in the DC universe appeared in ShareAction’s ‘top 10’ and which appeared in the bottom 10 when it came to taking action on climate change.
MajorityAction – as US-based pressure group, looked at the number of votes these asset managers supported on 12 key shareholder resolutions. These resolutions were supported by Climate 100+, and designed to improve climate change accountability in the energy, motor and airline industries.
The UNPRI ‘Leaders group’ is a list of the 20 asset managers that the UN-backed organisation believes are leading the industry and excel on climate change. Within the UK DC universe though just two managers appear on this list — LGIM and SSGA.
Meanwhile Morningstar products its own ‘sustainability ratings’. This data looks at the number of funds offered by each asset manager which have an ‘above average’ rating.
Not all the fund managers in the DC universe appear in all of these reports, however, by looking across this spectrum it is clear that asset managers such as LGIM are leading the way. As well as being on the UNPRI leaders list, it also appears in Share Action’s top 10 — alongside Schroders, Aegon Asset Management and Aviva Investors. LGIM also supported 12 out of 12 of the key climate change resolutions highlighted by Majority Action.
Asset managers with poorer rankings include JP Morgan Asset Management, Vanguard and BNY Mellon (the parent group of Newton) all of whom are rated as being in the bottom decile by ShareAction.
In addition Vanguard did not support any of these resolutions designed to address climate change issues across the energy, motor and airline industry; while BlackRock supported just two of these shareholder votes.
However, Morningstar’s sustainability ratings show that companies like Amundi, UBS, and JPMAM have some of the highest number of ‘sustainable’ rated funds.
Corporate Adviser’s ESG in DC pensions report looks at the three main ways in which asset manager and pension providers aim to address ESG issues, in particular in relation to climate change and carbon emissions.
The three main ways are by divestment, pressurining management to change via engagement and stewardship activity or by offsetting. While the jury is out as to which will ultimately prove to be the most successful, the report looks at asset managers activities in relation to each of these areas. Many will combine all three as part of a comprehensive ESG strategy.
In order to measure engagement levels Corporate Adviser also asked asset managers how many shareholder votes they take part in and how often the vote against the board.
Aviva Investors was the asset manager most likely to vote against the board, according to this information, with 23 per cent of votes going this way.