Half of the world's largest asset managers are failing to adequately incorporate environmental, social and governance (ESG) considerations in their investments, research by ShareAction has uncovered.
In total, 38 of the 75 companies studied, managing more than $36trn (£28trn) of assets, were found to be neglecting the ecological and social harms of their investments.
Six of the world's largest asset managers, including BlackRock and State Street, were among the worst performers, with US firms scoring far worse than their European peers on average.
Despite many poor scores, all of the companies studied are members of the UN-backed Principles for Responsible Investment, and 75% have joined the Climate Action 100+ initiative.
While many in the industry are eager to promote their ESG credentials, our analysis clearly indicates that few of the world's largest asset managers can lay claim to having a truly sustainable approach across all their investments, said ShareAction senior analyst Felix Nagrawala.
It is imperative that they start to account for the real-world impacts of their investments and step up to meet the challenges of the social and environmental crises we are now facing.“
ShareAction's Asset Owners Disclosure Project reviewed investments of the world's 75 largest asset managers for governance, climate change, human and labour rights and biodiversity.
The 38 laggards identified were found to have weak or nonexistent commitments, failing to account for real-world impacts across their mainstream assets.
The majority of European asset managers generally outscored their peers in other regions, particularly Dutch firms, with most of the US-based investors far behind the curve.
The five largest Japanese asset managers included in the ranking generally performed better than their US counterparts and outscored their peers in the Asia Pacific.
Robeco, BNP Paribas Asset Management, Legal & General Investment Management, APG Asset Management and Aviva Investors complete the five best-performing firms in the ESG study.
Carola van Lamoen, head of active ownership at Robeco, says: Robeco's place at the top of the leader board reflects our long-standing history in this field, and our commitment to driving positive change through rigorous stewardship and focus on ESG integration.
“We acknowledge that in order to truly meet the challenges in the world, industry standards must be raised across the sector. We hope this ranking will propel the industry into action as we continue to play our role in educating and sharing best practices.“
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