Half of 75 of the world’s largest asset managers “fail to account for their real-world impacts across their mainstream assets,” ShareAction has said on the basis of a new analysis of their approaches to responsible investment.
The responsible investment campaign group said 38 asset managers globally fell into the bottom two categories (D and E) of the latest ranking carried out by the Asset Owners Disclosure Project (AODP), which ShareAction took over in 2017.
The world’s six largest asset managers, including BlackRock, State Street and Vanguard, were among the worst performers.
Among UK asset managers getting a D-grade were Baillie Gifford, Insight Investment, and Royal London Asset Management. On average the UK was outperformed by France and the Netherlands.
Some asset managers, such as Robeco, BNP Paribas Asset Management and APG, were showing leadership, but none of the 75 managers were assessed as demonstrating best practice across all of the selected responsible themes.
ShareAction said the number of poor performers was “particularly concerning” because all of the asset managers included were signatories of the Principles for Responsible Investment and 75% had joined Climate Action 100+.
According to ShareAction, it reviewed asset managers’ responsible investment practices in respect of governance, climate change, human and labour rights, and biodiversity, with managers ranked on the basis of disclosure and management.
Asset managers scoring in the D or E categories often lacked “appropriate engagement and escalation processes,” said the campaign group.
Luba Nikulina, global head of research at Willis Towers Watson, said ShareAction’s research would serve “as a valuable tool for asset owners looking to ask tough questions of asset managers”.
“While it is positive to see leaders in this ranking taking affirmative action on systemic ESG risks, this ranking by ShareAction helps demonstrate just how much progress needs to be made by the industry.”
The analysis behind this ranking was the first time that AODP expanded the scope of its work beyond climate change. ShareAction is planning to publish two in-depth analyses on respondents’ performance on climate change and biodiversity, and on labour and human rights.
The assessment scope was determined based on IPE’s 2018 list of the Top 400 asset managers, “balanced against regional concentration”.
The assessment was based on direct disclosures for 69 asset managers, with six failing to respond to the survey: Bradesco Asset Management, E Fund Management, Fidelity Investments, JP Morgan Asset Management, PGGM, and SEB.
A spokesperson for PGGM told IPE the asset manager was committed to transparency and disclosure with regard to sustainable investing, which is why it provided as much information as possible through its own channels, and limited itself when it came to filling out surveys.
“This implies making choices between the variety of surveys and in the majority of cases not filling these out ourselves,” he added. “However, we support parties’ endeavours by offering checks on the factual information.”
The top 10…
|2||BNP Paribas Asset Management||A|
|3||Legal & General Investment Management||A|
|4||APG Asset Management||A|
|6||Aegon Asset Management||BBB|
|7||Schroder Investment Management||BBB|
|8||NN Investment Partners||BBB|
… and the bottom 10
|66||Bradesco Asset Management||E|
|68||Mellon Investments Corporation||E|
|69||Vanguard Dimensional Fund Advisors||E|
|70||Dimensional Fund Advisors||E|
|71||J.P. Morgan Asset Management*||E|
|72||Credit Suisse Asset Management||E|
|74||MetLife Investment Management||E|
|75||E Fund Management||E|
*J.P Morgan last month announced a range of initiatives to reinforce its commitment to sustainable investing, including becoming a signatory of Climate Action 100+. ShareAction’s assessment was based on disclosures released no later than October.
The AODP ranking and report can be found here.