The world's largest asset managers are not doing enough to address the most dangerous crises of our time, according to a report by ShareAction.
But European managers are leading the way in managing real-world sustainability impacts, with the top ten performers across responsible investment themes being European managers.
The 'Point of No Returns' report provides overall rankings and a heatmap of asset managers' responsible investment performance across five areas: governance, stewardship, climate, biodiversity, and social issues.
Only six of 39 European asset managers were allocated a grade of D or E in ShareAction's ranking. In contrast, more than half of non-European managers (13 of 25 from North America and 8 of 13 from Asia Pacific) received a D or E grade, and none were graded higher than B.
But several European asset managers performed poorly in all areas of the survey, with four rated D and two rated E and in the bottom ten managers overall.
ShareAction said the European regulatory environment is likely having a positive impact on the responsible investment performance of European asset managers relative to other regions.
In its recommendations to policymakers, ShareAction said the introduction of mandatory reporting in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and work with the asset management and the wider investment industry to develop guidance to help with implementation should be implemented.
The development and enforcement of strong, mandatory stewardship rules covering asset owners, asset managers and service providers that cover responsible investment factors must also be introduced, the group said.
Claudia Gray, head of financial sector research at ShareAction, said: "We did see some surprising and inspiring green shoots of progress, with some well-known names making significant improvements, and European asset managers, in general, leading the pack.
"But as global standards remain so low, almost every asset manager needs a jolt to the system. We are running out of time to act on these global problems if we want to avoid catastrophes."
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