More than US$7.3 billion of asset owners’ money has been recently invested by asset managers in new bonds issued by companies developing fossil fuel projects, according to analysis by French NGO Reclaim Finance. The report, which analysed the investments of 25 European and US asset managers, found that the firms were continuing to support fossil fuel developers through their investments and voting behaviour. Asset managers are “disregarding” the long-term sustainability-focused interests of their asset owner clients, Reclaim Finance said, urging asset owners to increase engagement and to stop entrusting new mandates to managers overwhelmingly supporting fossil fuel expansion. The assessed asset managers – including Amundi, Allianz Global Investors and UBS Asset Management – are failing to align their practices with climate science, the report said, pointing to investments in bonds issued by fossil fuel developers between 1 January 2023 and 30 June 2024. “Asset managers are entrusted with asset owners’ money, but they fail to follow through on managing climate risks,” said Agathe Masson, Sustainable Investment Campaigner at Reclaim Finance. “Asset owners should look at how their money is being invested and challenge asset managers’ overall practices. Allocating new assets to fossil fuel developers will exacerbate climate change and increase climate risks for generations to come, which is in total contradiction with pension funds and other asset owners’ long-term horizon.”
