(Bloomberg) — Really? greenhasham or greenwashing?
That’s the question ESG World is asking after J.P. Morgan Asset Management and State Street Global Advisors Resign international Largest investor group Established to combat climate change.
One explanation for Thursday’s withdrawal from Climate Action 100+ is that a fierce Republican attack on U.S. environmental, social and governance investment strategies is prompting Republicans to pressure major polluters such as ExxonMobil and Shell to decarbonize. Well-known companies try to downplay or obscure their sustainability efforts. There is no doubt that financial sector climate groups have been the primary target of ESG backlash.
Another way of looking at this is that some large investors will only sign up to a scheme like CA100+ if there is a clear marketing benefit. Just a few years ago, being a signee of an organization like CA100+ was seen as a badge of honor, touted in press releases and company reports. Today, membership has become a burden, and those who have never truly committed to the cause are the first to drop out.
Mark CampanaleThe founder and director of energy transition research firm Carbon Tracker is ready to give asset managers the benefit of the doubt. He said the anti-ESG lobby has “put the fear of God in investors” and this will only become more extreme if Donald Trump wins the US presidential election later this year. In this context, sustainable development is going underground.
“Institutions will continue to embed sustainability because it is a real risk, but they will do it without showing off or showing off,” Campanale said. “It’s easier to go underground than to showcase big initiatives that draw the wrong attention. What we’re seeing now is greening.”
Others are less generous. Rebecca Self, a former senior green finance banker at HSBC Holdings Plc who now runs a sustainability consultancy, said the departures made her question “whether these organizations were right in the first place. “There is a real commitment to the overall goals of the alliance.”
Ben Cushing, director of the Sierra Club’s Fossil-Free Finance Campaign, is even stricter. “Asset managers that succumb to hypocritical political attacks by climate deniers are signaling that they will abandon their fiduciary duties to mitigate climate risks for short-term gain,” he said.
State Street Global Advisors, which manages $4.1 trillion in assets, said Thursday that CA100+’s reforms expect signatories to take a more practical approach, requiring companies to “move from words to actions,” in contrast to their proxy voting The positions are inconsistent. Company participation. JPMorgan Asset Management, which manages $3.1 trillion in assets, made no mention of CA100+’s new strategy, saying it was leaving the group because it had made significant investments to develop its own climate risk engagement framework.
BlackRock Inc. is also changing its relationship with CA100+, and its statement Thursday, like those from other companies, came with mixed opinions.
The world’s largest fund manager said it will transfer CA100+’s membership to BlackRock International, meaning the New York-based parent company will no longer be affiliated with CA100+. The company said the majority of clients looking to invest in solutions to help them achieve their climate, energy transition and decarbonization commitments live outside the United States, and that CA100+’s new strategy “will raise legal considerations, particularly in the United States.”
Adam Matthews, chief investment officer at the Anglican Pensions Council, said the move was a “pragmatic workaround” that would allow BlackRock to maintain its reputation among clients where climate is an important theme, while It can also take away some heat. In the United States, the company and CEO Larry Fink have been the focus of Republican election campaigns.
“BlackRock, in changing affiliations, has recognized that a significant portion of its client base wants the firm to be involved,” Matthews said. He said the move “acknowledges that over time, most assets will final destination”.
Eli Kasargod-StaubThe executive director of Majority Action, a Washington-based nonprofit focused on responsible investing, disagrees. He called BlackRock’s move an “outrageous mismanagement of risk” that showed the company views climate action as “optional window dressing.”
Regardless of who is right about the reasons why companies are withdrawing from CA100+ or realigning their membership, this week’s withdrawals raise larger questions, particularly about how much influence investors can have over polluters.
Harald Walkate, former head of ESG investing at Natixis Investment Managers and now a partner at sustainable investment adviser Route17, said the departures may reflect a growing view among investors that CA100+’s core strategy of “engagement” is one that rarely generates expectations. Results tools. .
Valkett said the measure appeared to be based on the premise that investors could force companies to decarbonise, “which would enable us to achieve a net-zero economy”. “But, of course, tackling climate change will require more fundamental transformations in most industrial sectors,” he said.
The incentives of large financial institutions may not be aligned with world climate goals.According to reports, regulation may follow Lucy Pinsonexecutive director of the nonprofit Reclaim Finance.
“All of this at least removes any ambiguity about the ability of financial actors to support economic transition in the context of ecological urgency,” Pinson said. “Without regulation, the global economy faces catastrophic financial risks on the climate change frontline.” Millions of people will be unbearably affected.”
To contact the author of this story:
Alastair Marsh in London (email protected)
