Baillie Gifford has become the latest investor to pull out of collaborative climate initiatives, saying they risk “distracting from our core responsibilities”.
The €225bn asset manager, based in Scotland, has ditched shareholder engagement network Climate Action 100+ (CA100+) and the United Nations-backed Net Zero Asset Managers initiative (NZAM).
It led engagement with Brazilian oil company Petrobras and Irish industrials firm CRH for CA100+, according to its latest stewardship report.
A spokesperson said the decision was made “after careful consideration”.
“Our membership has become contested, and this risks distracting from our core responsibilities.”
Asked if Baillie Gifford had changed its investment policy around climate, the spokesperson said “this change in membership status will not affect our commitment to always act in accordance with the mandates given to us by our global client base”.
“This includes appropriate analysis of climate-related risks and opportunities where relevant to any investment case.”
Pension funds account for 45% of Baillie Gifford’s institutional client assets, including mandates from the London Collective Investment Vehicle (London CIV) and the Scottish Parliamentary Pension Scheme.
IPE contacted London CIV to ask its position on Baillie Gifford’s decision to exit CA100+, which the pension fund is itself a member of.
No response has been received at the time of publication.
Departures
CA100+ has been hit with a number of departures this year, driven largely by pushback against collaborative engagement and sustainable investment in the US – something that’s likely to be exacerbated by the recent re-election of Donald Trump as US president.
Despite being headquartered in Edinburgh, nearly half (45%) of Baillie Gifford’s client assets are from North America, mainly the US. A further 35% comes from UK clients, with the rest in Europe and Asia Pacific.
Goldman Sachs Asset Management, Nuveen and Alliance Bernstein have all left CA100+ from North America, while insurance giant Swiss Re has quit from Europe.
Vanguard and Green Century have cut ties with NZAM.
An ESG specialist at one of the departing firms told IPE that, along with pressure from the US, there was a growing recognition that institutions had signed up to too many initiatives without allocating adequate resources to many, leaving them at risk of being accused of greenwashing.
Another said that many of the initiatives were set up before there was legal oversight of such commitments. Now sustainability is a bigger focus for regulatory and compliance folk within companies, the pledges are being assessed by lawyers who are uneasy about what they involve.
A spokesperson for CA100+ said it was “disappointed” to lose Baillie Gifford.
Overall, the initiative continues to expand its membership, despite the withdrawals.
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