- Reclaim Finance found that collectively 30 asset managers have $82 billion in companies developing new coal projects and $468 billion in 12 major oil and gas companies.
- In a ranking of the asset managers, six received the worst possible score — zero out of 30.
- Because of its size and fossil fuel investing records, Vanguard drew particular ire and a collective of 100 organizations wrote an open letter to its CEO calling out the company's lack of climate action.
Giant global asset managers are still dumping tens of billions of dollars into new coal projects and hundreds of billions of dollars into major oil and gas companies.
That's according to a report out Wednesday from Reclaim Finance, an organization disclosing financial sector investments in fossil fuels.
The report, titled "The Asset Managers Fueling Climate Chaos," found that collectively 30 asset managers have $82 billion in companies developing new coal projects and $468 billion in 12 major oil and gas companies.
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"Is the asset management industry changing its investment practices in line with climate science, reducing investments in coal, oil, or gas expansion? Unfortunately, the answer is an emphatic 'no,'" Lara Cuvelier of Reclaim Finance said in a statement released alongside the report. "Leading asset managers are kicking the can down the road without even asking companies to stop worsening the climate crisis."
The majority of the asset managers — 25 of the 30 — are members of the Net Zero Asset Manager Initiative (NZAM), which is a collective of asset managers with noble climate goals: "committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner."
Yet none of the 30 asset managers surveyed by the report have required companies in their portfolios to quit coal, oil and gas projects, according to Reclaim Finance.
Vanguard was one of six companies to score the worst possible score — zero out of 30 — but it drew specific ire because of its size and lack of meaningful action. More than 100 organizations representing over 6 million people published an open letter to Vanguard CEO Tim Buckley also published on Wednesday.
"With over $300 billion in fossil fuel exposure, Vanguard has become increasingly isolated as the biggest laggard on climate in the asset management sector," the open letter states.
"Vanguard is the world's second largest (and currently fastest growing) asset manager after BlackRock and these two giants are the world's two largest investors in fossil fuels and companies driving deforestation around the world," said Myriam Fallon, spokesperson for The Sunrise Project, an environmental organization that endorsed the Reclaim Finance report.
"While BlackRock has been taking steps to address the climate crisis and its contributions to it, Vanguard has done next to nothing," Fallon said.
Vanguard considers climate change "to be a fundamental risk to many companies and their shareholders' long-term financial success," a company spokesperson told CNBC. Furthermore, the spokesperson added, it is Vanguard's responsibility to make sure investors know of those risks and that portfolio companies "are taking the appropriate steps to manage and mitigate those risks on behalf of their shareholders."
BlackRock CEO Larry Fink has been a leader in saying that climate change is a financial issue. "Climate change has become a defining factor in companies' long-term prospects," Fink wrote in his 2020 annual letter to CEOs. "But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance."
Even as BlackRock has been a climate catalyst on Wall Street, its investing portfolio still has climate issues, according to Reclaim Finance. "BlackRock most embodies the hypocrisy of too many asset managers: whilst being the biggest member of the NZAM, it still invests in the 11th biggest coal producer worldwide and massive coal expansionist Glencore," Cuvelier said.
BlackRock did not immediately respond to requests for comment.
This story has been updated to include a comment from Vanguard.