Climate Crisis? Fund Managers Are Sticking With Fossil Fuel

None of the world’s largest asset managers has definitively called on fossil-fuel companies to stop the development of new oil and gas projects.

Surely, one would think, given all the climate-conscious talk coming from Wall Street bigwigs like BlackRock Inc. Chief Executive Officer Larry Fink, that the investment industry would be using all of its muscle to press the world’s worst polluters to reduce their production of dangerous greenhouse gases.

Instead, the opposite is true.

Together, 30 of the biggest asset managers have at least $550 billion invested in oil, gas and coal companies that have expansion plans, and even more alarmingly, they continue to provide “fresh cash to companies that are ignoring climate science,” said Lara Cuvelier, sustainable investment campaigner at Reclaim Finance, a nonprofit which published a scorecard Wednesday grading investment firms on their environmental commitments.

In effect, the fund industry is “adding fuel to the fire,” she said.

And this is happening against a backdrop where the world’s leading climate finance experts and economists warn too much money is pouring into fossil fuels, putting the planet on track to blow past its limit to avoid catastrophic global warming. The Reclaim Finance-led report also provides a checkup on an industry that unveiled the Glasgow Financial Alliance for Net Zero almost a year ago, when bankers and fund managers exclaimed how they’re committed to helping fight climate change.

Instead, Reclaim Finance found that all 30 of the fund managers’ policies and investment guidelines are “too flawed” for them to align their entire portfolios with a net-zero emissions target. The investment firms included in the survey ranged from BlackRock and Vanguard Group Inc. in the U.S. to Axa Investment Managers and Amundi SA in Europe.