The green-finance gulf between EU investors and US rivals such as BlackRock is widening, a campaign group says
ADVERTISEMENTEuropean asset managers are following a greener path as their US rivals’ interest in the environment wanes, a study by ShareAction has found.
New Brussels regulations appear to be leading to a widening gulf between EU financiers and big players from across the Atlantic, who the lobby group accuse of backsliding on environmental commitments.
The asset management sector has become a major focus for new EU green-finance laws – as the intermediaries can often become significant shareholders when they invest funds on behalf of their clients.
By boosting shareholder rights and corporate disclosures, the hope is that EU laws can make it easier for big investors to sway company decisions on issues such as whether to cut carbon emissions – and ShareAction believes those laws are already having an impact.
The study offers “a reason for optimism in responsible voting behaviour,” Emily Ahmed, ShareAction’s EU policy manager said in a statement, citing the impact of a 2017 EU legislative tweak to help investors steer a company’s long-term future.
Despite their potentially decisive role, however, the world’s largest players still aren’t pulling their weight, added the report by ShareAction, which campaigns for responsible investment.
Its league table is topped solely by European players – with Crédit Agricole’s Amundi, the UK’s Man Group and Finland’s Nordea Asset Management all ranked in the top ten when it comes to active voting on issues such as climate change or staff unionisation.
But that stands in stark contrast to US rivals. In 2023, BlackRock, the world’s biggest asset manager, voted in favour of just 8% of environmental and social shareholder resolutions, down from 24% the year before, the study found.
Officially, BlackRock has said sustainable investing is central to its operations, with chairman Larry Fink writing to tell shareholders in 2021 that climate risk matters for the bottom line.
But the company has also said it must act for clients’ long-term financial interests – and that many of the green ideas actually put to the vote by shareholders are poor quality.
“We analyse each resolution on a case-by-case basis,” a BlackRock spokesperson told Euronews in an emailed statement, adding that many of the 2023 resolutions were “over-reaching, lacking economic merit, or simply redundant” and hence “unlikely to help promote long-term shareholder value.”
The company has also argued that just counting votes is overly simplistic. In a report published last year, BlackRock said it voted against the chair of Swiss energy company BKW for being too opaque on climate plans, and that forcing Chevron or ExxonMobil to commit to absolute emissions reductions targets would be too prescriptive.
ShareAction found just eight cases in a year where shareholders succeeded in passing environmental and social resolutions – as normally it's a company's own management that sets the agenda. But it says that figure could have been eight times higher if the big four asset managers — BlackRock, State Street, Vanguard and Fidelity — had used their substantial voting power.
The EU’s sustainable finance strategy, first set out in 2018, aims to ensure private funds help pay for the transition to a zero-carbon economy – and officials are particularly worried about financiers who make false claims about helping the environment, making it harder for investors to make informed choices.
“We have identified several high-risk areas of greenwashing including misleading claims about real-world impact and claims about engagement with investee companies,” with funds furnishing few details on how they seek to change behaviour, the European Securities and Markets Authority’s Verena Ross said in a November speech.
