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Alternative Market Briefing

Large global asset managers worth $37tn fail to meet climate goal

Wednesday, November 27, 2019

Laxman Pai, Opalesque Asia:

The world's largest investment funds - controlling a mammoth $37 trillion in assets have failed to push their investee companies to accelerate the transition to a low-carbon economy, according to a study.

The world's 15 largest asset management groups (with collectively $37Tn in assets in all classes) were found to be - through their equity portfolios - between minus 16% and minus 21% deviated from a Paris Aligned target (against a market average of minus 18%), said the study by U.K.-based think tank InfluenceMap.

This implies they are overweight in companies deploying brown technologies, and underweight those deploying green technologies in four key sectors: automotive, oil & gas, electric power, and coal production, representing roughly 10% of global equity markets.

Investors globally are misaligned with the goals of the Paris Agreement in significant portions of their portfolio holdings covering the automotive, electric utilities, and fossil fuel production sectors.

These sectors are worth a collective US $8Tn in market value, close to 10% of all global listed equity value. This misalignment is a key finding of FinanceMap, a newly launched platform that examines the asset management sector through a climate lens, looking at portfolios, investor-engagement processes and shareholder resolutions.

The predominance of index-linked trading strategies employed by the asset managers means outright divestment or even significant un......................

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