LONDON (Reuters) – World asset managers controlling trillions of {dollars} are failing to put money into a means that can defend local weather, biodiversity and folks, regardless of efforts by the business to advertise its sustainable finance credentials, the company accountability group ShareAction mentioned on Sunday.
Funding methods which think about environmental, social and governance (ESG) dangers, or put money into corporations which look to have a constructive influence on local weather, folks and the pure world, have raised trillions of {dollars} globally.
But, two-thirds of 77 asset managers surveyed, which management $60 trillion of belongings, had “critical gaps of their accountable funding insurance policies and practices,” the group discovered primarily based on an evaluation of their insurance policies.
These embrace a failure to evaluate and forestall destructive impacts on nature or embrace Scope 3 emissions, these tied to an organization’s worth chain, in local weather targets.
“As managers of tens of trillions of {dollars} … their selections have an unlimited influence all around the world. … (however) there stays an absence of ambition to drive real-world enhancements,” mentioned Claudia Grey, head of monetary sector analysis at ShareAction.
ShareAction assessed managers on a number of hundred indicators, together with their holdings of fossil gas investments; whether or not they have set shorter-term emissions reductions targets and the way they combine biodiversity insurance policies into decision-making.
Among the many greatest improvers was J.P. Morgan Asset Administration, which rose nearly 60 locations to thirteenth after adopting social and biodiversity insurance policies, in addition to partaking on subjects resembling human capital administration, the group mentioned.
ShareAction additionally discovered the portion of managers performing considerably worse than their friends has fallen from 51% in 2020 to 35% in 2023.
