Major Asset Managers Exit Climate Action 100+, Signaling Shift in Influence
Two major asset managers, State Street and JP Morgan, have left the Climate Action 100+ network, while BlackRock has limited its involvement. This significant shift follows a $14 trillion exodus, marking the largest departure in the network's history.
The Climate Action 100+ network, which aims to engage with the world's largest greenhouse gas emitters, has seen a substantial reduction in its influence. The departure of State Street and JP Morgan, along with BlackRock's scaled-back involvement, means the three largest index fund providers are no longer part of the alliance.
Gustave Loriot-Boserup, founder at Compass Insights, described the exits as 'not surprising', citing the historical voting patterns of these asset managers against CA100+ proposals. Research by Compass Insights and ShareAction revealed that some members repeatedly voted against resolutions flagged by the alliance. The exits occurred just weeks after Exxon Mobil announced it would take two of its shareholders to court for filing a climate resolution. No activist resolution will be filed at the Exxon AGM this year, raising questions about asset owners' influence over climate transition planning at oil and gas firms.
Despite the significant departures, Sam Mahtani, founder and managing director at Alpha ESG Consulting, argues that the impact should not be overstated, as CA100+ still has a substantial signatory base. Loriot-Boserup believes investors should use their powers and adjust positions to individual companies if needed, predicting an increased appetite for split voting solutions. Keith Guthrie, head of Sustainability at Cardano and Now: Pensions, emphasizes the importance of alignment on values when selecting a manager for stewardship.
The departure of major asset managers from the Climate Action 100+ network signals a significant shift in the alliance's influence. While the impact remains to be seen, investors are encouraged to use their powers and align with managers who share their values to drive climate action.
