Maybe it was only a question of when, not if. Last Thursday BlackRock, the world’s largest asset manager, left the Net Zero Asset Managers (NZAM) initiative. At the very least the move raises questions about European pension funds’ reactions in the form of mandate decisions and the future of NZAM.
The initiative itself yesterday said it was suspending operations while it carried out a review “to ensure NZAM remains fit for purpose in the new global context”.
An estimated €28bn of AP7’s investment mandates are currently run by BlackRock, and the asset owner has indicated that BlackRock’s decision to quit NZAM could affect whether it renews the contracts.
The head of RI at another European pension fund, which does not currently use BlackRock, told IPE the manager’s withdrawal from NZAM was seen very negatively but was not necessarily a dealbreaker for mandates.
BlackRock is the first major asset manager to leave NZAM since Vanguard did a couple of years ago, with Climate Action 100+ so far having taken the brunt of the US finance exodus from climate groups. Last year European asset owners indicated to IPE that they would mostly continue to work with asset managers who had left the engagement group.
While a US federal judge recently ruled that a corporate pension fund had breached federal law by allocating to ESG investments, in the UK some stakeholders will next month gather to discuss “the opportunity generated by the government’s pension review for clarification of the legal duties of investment fiduciaries”. The clarification sought in this context is in favour of investors addressing social and environmental matters.
In the Netherlands mega-manager PGGM has disbanded its academic advisory council after its members raised concerns about the possible negative impact on risk and return of PGGM’s plans to switch to a more concentrated, impact-based portfolio.
The European Commission’s sustainable finance advisers have been busy, publishing a proposal for the creation of a new regulatory label for climate transition benchmarks before the holidays, and returning after the break with recommendations for updates to the EU taxonomy.
Sustainable finance specialists are eagerly awaiting news about the Commission’s plans for a so-called omnibus legislation, which critics see as an attempt to scale back requirements for corporates. German politicians have been pushing back against the Corporate Sustainability Reporting Directive.
In other news, institutional investors have filed a new shareholder resolution at Shell for this AGM season, challenging the oil major on the assumptions underlying its LNG growth strategy.
Items to note:
- IPE’s latest supplement on class actions and investor litigation is out now.
Susanna Rust
ESG Editor
This news briefing was published earlier in the week. If you would like to receive it regularly, on your ‘IPE profile’, go to ‘My Newsletters‘ and select any from the list.
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