Amundi executive sees ‘reshuffling’ of ties to asset owners
[NEW YORK] How an asset manager handles climate risk is playing an increasingly important role in the choices that European institutional investors make when assigning mandates, according to Elodie Laugel, chief responsible investment officer at Amundi.
Pension funds and other institutional investors in Europe are now “even more vocal than in the past” in insisting that their external managers take climate risk seriously, she said on Thursday (Sep 25) during a Bloomberg Green panel in New York. And that is leading to a “reshuffling” of the market for investment mandates, she said.
The comments follow decisions by a number of pension funds in Europe to sever ties with US asset managers based on concerns that issues such as climate change and basic stewardship are not being properly handled.
Recent examples include PFZW of the Netherlands, which recently dropped managers including BlackRock.
Similar concerns have been voiced by pension funds in Scandinavia and Britain. In February, the People’s Pension in the UK awarded a mandate to Amundi and Invesco, citing their sustainability and responsible investment credentials.
The funds were previously overseen by State Street, which is among several large US firms that have exited the Climate Action 100+ coalition that pushes companies to reduce carbon emissions.
A NEWSLETTER FOR YOU
Friday, 12.30 pm
ESG Insights
An exclusive weekly report on the latest environmental, social and governance issues.
“There is more and more” of this kind of “alignment” being sought by pension funds, noted Laugel. “The consequence of that is that asset managers have to be clear on their positioning so institutional investors can pick the ones that are the most aligned with their own positioning.”
She also commented on the “polarised world” in which money managers are trying to tackle political pushback while dealing with climate risk. Investors need to figure out how to handle “very fragmented regulatory frameworks, in particular when it comes to disclosure”, she said.
The present environment of political backlash against green policies in the US is bad news for climate investors with a short-term focus, but not necessarily for those focused on the longer term, said Sarah Kapnick, global head of climate advisory at JPMorgan Chase, at the same panel.
For short-term climate investors who placed bets on current policy, the thesis has now been “blown up”, Kapnick added. Still, the global head of climate advisory said she is “incredibly optimistic”.
“Finally we are talking with nuance about adaptation and resilience and all the ways one can think about how to invest in it,” she said. “There are opportunities in every sector, in every part of the world.”
Share with us your feedback on BT's products and services
