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How the World’s Biggest Asset Managers are Driving the Climate Crisis
By Jessye Waxman June 27, 2023

In the last two years, many of the world’s largest financial institutions – including some of the world’s largest asset managers – have made commitments to manage their investments in line with the goals of the Paris Agreement. Despite this, institutional investors like BlackRock, Vanguard, and State Street, which manage the investments and retirement savings of millions of Americans, have continued to pour billions of dollars into companies that are building out new fossil fuel projects and locking us into a carbon fueled future.

Institutional investors have two big sources of power. As investors, they get to decide where, how, and how much of theirs and their clients’ money they invest. As shareholders, they are partial owners of many companies, which means they get to leverage their influence over corporate decisions by using their proxy voting power. By using these two in tandem, institutional investors can have a huge influence in steering the expansion or decarbonization plans of fossil fuel companies and other corporate polluters.

2023 ASSET MANAGER SCORECARD

This year’s scorecard, “Who’s Managing Your Future? An Assessment of Asset Managers’ Climate Action” published by Reclaim Finance in partnership with the Sierra Club and other advocacy groups, assesses how effectively the climate policies of the world’s largest asset managers have translated to real-world emissions reductions in the fossil fuel sector. The scorecard reveals that asset managers like BlackRock, Vanguard, and State Street are well behind the curve of where they need to be in order to hit global climate goals.

Very few asset managers across the globe are taking steps to stop financing companies engaging in fossil fuel expansion, and very few are setting the right expectations for how they will hold companies accountable for their contributions to the climate crisis. This includes weak, inadequate policies about how they will use their shareholder power to influence corporations to act.

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