AMWatch

Fidelity, Capital Group score worst in climate engagement

Fidelity Investments and Capital Group ranked the worst of the world’s 10 biggest asset managers last year on pushing high-carbon emitters to curb their role in global warming, according to a report.

Photo: HENNING BAGGER/Henning Bagger / henning bagger

Fidelity, which oversees USD 3.8 trillion, was given "D" marks, while Capital Group, with about USD 2 trillion, scored “C-,” according to Influencemap, a London-based think tank.

Money managers need to press companies, particularly those in the automotive, fossil-fuel production and utility industries where stranded assets are a large risk for investors, it said.

"Forceful engagement with the companies in these sectors to hasten their transition to low-carbon technologies must occur if the finance sector wishes to align its portfolios with Paris climate goals," Influencemap said in the report.

Legal & General Investment Management scored the highest on engagement, followed by Allianz SE and Amundi SA, Influencemap said. They, as well as other high-scoring companies belong to Climate Action 100+, an investor group that seeks to pressure the world’s largest carbon emitters to cut their greenhouse gas emissions.

"While ESG issues can be nuanced and don’t typically lend themselves to simple ‘yes/no votes,’ it is an area of great importance for us and our clients," Los Angeles-based Capital Group said in a statement. "Our investment professionals evaluate and vote on all proxy proposals. This is supported by our governance and proxy team, which engaged in more than 400 company meetings specifically on ESG topics, including climate change, in 2020."

The rating doesn’t “accurately represent our commitment to ESG, and specifically climate change,” said David King, Fidelity’s head of ESG stewardship, in an email. "Unfortunately, we have not had the opportunity to meet with this group and educate them about our ESG investment process."

Boston-based Fidelity said its support for environmental proposals increased to 46 percent last year from 29 percent in 2017. Additionally, the firm engaged with about 800 companies to discuss proxy voting issues such as climate change, King said.

In addition to analyzing engagements of the world’s 30 largest asset managers, Influencemap said it reviewed the firms’ investments and support for climate-related shareholder resolutions to see how they aligned with Paris climate goals. Overall, the large U.S. money managers continue to trail their smaller European counterparts.

That said, Blackrock Inc., the world’s biggest money manager, said last month that it plans in 2021 to target more corporations and back more investor proposals that hold directors accountable when their business practices or disclosures fall short on climate. The New York-based firm joined Climate Action 100+ last year.

"An acceleration of this trend will send a powerful signal to the corporate sector that shareholders are serious about climate risk and the energy transition," InfluenceMap said.

Company Engagement Scores
Legal & General A+
Allianz/Pimco B+/A-
Amundi A-
BlackRock B
State Street Global Advisors B-
Vanguard C
JPMorgan Asset Management C
Goldman Sachs Asset Mgmt C
Capital Group C-
Fidelity Investments D

Source: InfluenceMap

More from AMWatch

SEB sees EU creating liquid secondary green bond market

With the EU bound to issue EUR 225bn worth of green bonds, this large amount of uniform issuances could help establish a secondary market for green bonds for the first time, SEB Denmark Head of Sustainability Lars Eibeholm tells AMWatch.

House of Reach: We enjoy working with smaller fund managers

Swedish advisor and incubator House of Reach moved into the Danish market just before 2021 kicked in. With a Finnish expansion and new team member soon in place, co-founder Fredric Andersén tells AMWatch the challenges institutions as well as asset managers are facing and why the firm has become more selective about partners.

Kirk Kapital grabs sustainability chief from Danske's new flagship fund

Danske Bank Asset Management has lost one of the analysts behind its analytical ESG data tool, Mdash, to Lego fortune manager Kirk Kapital. Danske's now-former investment professional also served as chief ESG analyst and senior portfolio manager of its new sustainable global equity fund, launched last year.

Further reading

Latest news

See all jobs

Latest news from FinansWatch (dk)

Latest news from EnergyWatch

Latest news from ShippingWatch