Responsible investment policies at two thirds of the world’s major asset managers, representing some 60 trillion dollars in assets under management, fall short of their objectives, leaving the firms with “serious gaps” in their practices, according to a report published by British NGO Shareaction.
In its Point of No Returns report, ShareAction ranked 70 major asset managers who collectively manage more than 70 trillion dollars. The report found a clear geographical split between the asset managers. The best from Europe vastly outperformed their regional rivals in the US and Asia Pacific, filling every spot in the ranking’s top 10. US managers received the worst grades more than three times as frequently as their European rivals.
The four biggest asset managers in the world – Blackrock, Vanguard, Fidelity Investments and State Street Global Advisors – all scored poorly. It means managers with the greatest influence are coming worst in class, the report said. European firms, notably Robeco, BNP Paribas, Aviva and Legal & General, were found to have “robust policies” and demonstrated that investing can be both responsible and profitable, even for managers of a considerable size.
Global standards remain low
“We did see some surprising and inspiring green shoots of progress, with some well-known names making significant improvements, and European asset managers in general leading the pack,” said Claudia Gray, head of financial sector research at ShareAction. “But as global standards remain so low, almost every asset manager needs a jolt to the system. We are running out of time to act on these global problems if we want to avoid catastrophes.”
The Point of No Returns report ranks 77 major asset managers, who in total control over $77 trillion of assets under management, from best to worst in a league table. It found that the vast majority have consistently failed to invest in a way that will protect climate, biodiversity and people, ShareAction said.
Two-thirds of the managers surveyed – handling 60 trillion dollar in assets - scored a CCC rating or worse, indicating serious gaps in their responsible investment policies and practices for at least one section analysed. “A majority of the world’s largest asset managers are failing to meet even basic criteria, let alone take the steps needed to help protect people and planet for generations to come,” said Gray.
Santander and JP Morgan AM
Among the report’s more positive findings, Santander Asset Management and JP Morgan Asset Management rose up the rankings since ShareAction’s last report in 2020, in part thanks to their adoption of frameworks for their climate-related investments.