Pension schemes challenge asset managers’ green credentials

Asset managers have been told to "step up" by UK Pensions Minister Guy Opperman, as pressure grows on firms to demonstrate a more robust commitment to the climate impact of their investment activities.

This week, pension trustees have been criticising asset managers for failing to give details on their voting record at portfolio companies – a key way of keeping companies accountable for their impact on the environment.

Only a third of asset managers are able to meet pensions’ requests for information on how they cast their votes. "It’s totally unacceptable that fund managers are unable or unwilling to respond to reasonable requests from pension funds for information on how their votes were cast," said Opperman.

The world’s largest asset manager, BlackRock, has pushed back by announcing it may now vote against re-electing directors at companies that put forests, rivers, oceans, and other sources of "natural capital" at risk, or fail to disclose the risks.

UK leaders are piling pressure on countries and industries to go green, as the country prepares to host the UN climate summit Cop26 in November. The summit’s president, Alok Sharma, has urged countries to set more ambitious carbon emissions targets for 2030, in order to reach net zero by the middle of the century.

"Today’s global targets for 2030 are nowhere near enough to meet the Paris agreement temperature goal," he wrote on Thursday, noting the need to limit temperature rises to 2 degrees above pre-industrial levels.

Carbon emissions from burning fossil fuels dipped in 2020, but they are likely to rise again as countries begin to emerge from coronavirus restrictions and restart economic activity. By December, monthly emissions from energy use had already caught up with and surpassed pre-pandemic figures, according to the International Energy Agency.

However, renewable energy is taking off, with new research finding investments in renewables have outpaced fossil fuels with significantly higher returns over the past 10 years.

Competition in the renewable energy infrastructure market is also skyrocketing, with the number of new strategies launched in the asset class multiplying year on year.

On a separate note, we are delighted to announce that voting is now underway for the inaugural Institutional Asset Manager Awards, which aim to recognise excellence and leadership among asset managers and service providers across a wide range of asset classes and investment activities.

The results are decided on the basis of a poll of the entire Institutional Asset Manager readership that is taking place over a period of several weeks, with participants invited to nominate their top three candidates in all categories.

The winners will be announced at an exclusive virtual awards ceremony and industry networking event on Thursday 27 May. To participate in the poll, and for all information relating to the Institutional Asset Manager awards, see here.

Madeleine Taylor

Editor, Institutional Asset Manager

maddy.taylor@globalfundmedia.com

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