Northern Trust Asset Management has exited Climate Action 100+ and the Net Zero Asset Managers (NZAM) initiative.
A spokesperson for the €1.5trn US-based firm confirmed its departure in a statement, saying: “This decision reflects our confidence that we can independently and effectively manage material risks and engage with portfolio companies to safeguard and grow our clients’ capital.
“We have made and continue to make investments that support our independent stewardship and sustainable investing capabilities.”
Northern Trust AM is the latest in a string of signatory departures from climate action groups, following BlackRock’s departure from NZAM earlier this month. In a statement, BlackRock told clients its membership had “caused confusion” in some corners about its investment practices, and triggered legal challenges from Republican politicians in some states.
This decision then saw AP7, the largest of Sweden’s hefty national pension funds, indicate that implications of BlackRock’s decision to quit NZAM could affect whether the fund renews the estimated €28bn of its investment mandates.
Currently, BlackRock, Vanguard and State Street Global Advisors (SSGA) are all facing allegations that they contributed to rising energy prices for consumers, by pushing coal companies to reduce their emissions. The lawsuit has been filed by 11 US states.
BlackRock has since agreed to new disclosure requirements about its use of sustainable investment factors as part of a legal settlement with the Tennessee Attorney General.
Furthermore, some of the largest banks in the US have abandoned the Net Zero Banking Alliance. All of which have been overshadowed by president Donald Trump saying he would pull the US out of the Paris Climate Agreement.
NZAM, the world’s biggest investor climate coalition, soon after BlackRock’s announcement, suspended its activities, removing its net-zero targets and member obligations, indicating that growing anti-sustainability sentiment in the US had prompted it to rethink its strategy.
Last year, CA100+ confirmed that 71 investors had left the climate engagement group since June 2023.
The wave of notable exits from both groups has thrown into question how this may influence manager selection decisions for European asset owners.
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