Asset Managers Failing on Biodiversity, Climate Change

Analysis by ShareAction has found that 77 of the world’s largest asset managers “lack ambition” on net zero, deforestation and many key climate and biodiversity issues. ShareAction posed 100 questions to the asset managers, with the responses revealing that the managers are “out of sync” with the world’s “leading” scientists and the UN on emissions and net zero. Key findings of the report included asset managers having inadequate targets to reduce emissions, and continuing to invest in companies that are expanding their oil and gas production. It also found that only 25% have commitments on deforestation, with none committing to avoid other forms of damage to natural habitats, such as wetland draining for agricultural use or ocean pollution. ShareAction has recommended that asset managers address these issues by making commitments about the use of land and sea that protect critical ecosystems on land, rivers and oceans beyond forests that “take climate change seriously” through introducing detailed interim net-zero targets and ruling out investments in fossil fuel expansion. It also suggested managers invest “significant amounts” in clean energy companies across all funds to help the best climate solutions access the funding they need. Claudia Gray, Head of Financial Sector Standards at ShareAction, said: “It is alarming to see too many asset managers are failing to adapt their investments to tackle climate change and the destruction of biodiversity. [They] need to use the huge power they wield through the investments they hold to bring about a meaningful transition to a clean and sustainable future.”

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