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

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