Investors exit climate group amid politicisation

Climate Action 100+ (CA100+) has lost two more asset managers; Allspring and AllianceBernstein decided to leave in May. The high-profile withdrawals have been pinned to heavy politicisation of ESG.

This follows the departure of J.P. Morgan, Invesco, State Street, and Pimco earlier this year. Blackrock also scaled back its involvement.

CA100+ supports investors to ensure the world's largest corporate greenhouse gas emitters take appropriate action on climate change.

Despite an exodus, the engagement initiative still has more than 700 investors in its ranks, with asset owners representing US$4.6 trillion in assets, engaging with over 170 major entities.

A spokesperson from the Investor Group on Climate Change (IGCC), which runs CA100+ in Australia, confirmed that AllianceBernstein and Allspring have exited.

"Despite investors seeking to simply act in the best interest of their clients and beneficiaries, in the USA in particular, investor stewardship in relation to climate change, especially Climate Action 100+, has been politicised."

In March, several US state attorneys penned a letter urging US-based asset managers to not allow their investment decisions to be "commandeered by activists" to "push political goals".

IGCC said the letter "greatly misrepresents the nature of collaborative investor engagements and ignores the business rationale for addressing climate-related financial risk.

"Climate risk is material, it can manifest as financial risk, and institutional investors are well-served by acting on these risks and the resulting investment opportunities. If left unchecked, these risks threaten investors' long-term ability to sustain value and generate ongoing returns for their beneficiaries."

In June, CA100+ received reaffirmed endorsement from more than 40 asset owners across the globe, stating they remain "fully committed".

The investors included the California Public Employees' Retirement System (CalPERS), California State Teachers' Retirement System (CalSTRS), Nippon Life Insurance Company, the Church of England Pensions Board, and the New York State Common Retirement Fund.

The affirmation sends a signal that "factoring all material risks and opportunities into decision-making aligns with investors' fiduciary duty," the IGCC spokesperson said.

However, progress remains slow, with companies on average only 40% aligned to the CA100+ Net Zero Company Benchmark Disclosure Framework.

"The necessary business transition to a low-carbon future is already producing enormous benefits including creating hundreds of thousands of jobs, economic wealth, and growth for investors and companies.

"Hundreds of Australian, US and global investors remain signatories to Climate Action 100+ to engage the largest greenhouse gas emitting companies to reduce emissions, improve climate risk governance, and strengthen climate-related financial disclosures to ensure economic stability."

Investors that have left CA100+ "have all stated that they remain committed to climate action," the spokesperson added.

Allspring and AllianceBernstein did not comment at the time of publishing.