InfluenceMap Report Shows Funds Falling Short of Paris Target

Alternative Investments: Money Managers Aren’t Meeting Climate Funding Goal

November 28, 2019 | ESG and Sustainability, Investments, News

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Managers are leading on the transition to a low-carbon economy, says a new study.

InfluenceMap says that the world’s top 15 asset management groups aren’t driving toward a low-carbon economy. The top 15 managers – with $37 trillion in AUM – were 16% to 21% below the Paris Aligned target.

“The asset management industry is only starting to be aligned with the Paris Agreement. In the face of the climate emergency, it is critical for investors to show companies the path to follow,” said Christiana Figueres, Founding Partner, Global Optimism and Former Executive Secretary, UNFCCC.

InfluenceMap Report on Paris Accord Targets

The top-15 AUM classification of money managers include firms like BlackRock, Goldman Sachs, and Morgan Stanley.

The think tank’s report suggests that companies are not invested in green technologies in the automotive, electric power, coal, and oil & gas industries. The report shows that Legal and General Investment Management was 16% below the Paris Agreement’s 2C Pathway. Fidelity – at 21% under the target – had the largest gap.

“This misalignment is reflective of the fact that the majority of companies in these sectors are very far from aligning their business models to meet the goals of Paris and that the 15 leading players all hold diversified global portfolios of equities often using index driven strategies,” the report states.

Fiona Reynolds, CEO, Principles for Responsible Investment also offered a comment. “InfluenceMap is providing an invaluable knowledge base to investors, policymakers and civil society in exposing the pernicious negative climate lobbying activities of many business groups. We are pleased to see their analysis now extending to investors’ portfolio alignment with the Paris Agreement and corporate engagement programs on climate. Investors have a key role to play in addressing climate change and they need to use all the tools at their disposal. While there are many climate leaders in the investment community, there are also many laggards. This new work by InfluenceMap will become another significant reference point in the finance sector to help track and inform decisions around institutional investment strategies and good governance in responding to the climate challenge.”