Major Asset Managers Exit Stewardship Coalition, Raising Questions About Climate Action
A significant shake-up has occurred in the stewardship and climate change landscape. More than $14 trillion in assets have exited the stewardship coalition, including the three largest index fund providers. This departure raises questions about the future of collective action on climate change.
Keith Guthrie, sustainability head at Cardano and Now: Pensions, stressed the importance of shared values when choosing a manager for stewardship. However, the recent exits suggest a divergence in priorities.
Gustave Loriot-Boserup, founder at Compass Insights, was unsurprised by the developments, citing historical voting patterns of the departing asset managers against CA100+ proposals. Sam Mahtani, founder at Alpha ESG Consulting, played down the impact, highlighting the substantial signatory base still committed to the cause.
The exits followed Exxon Mobil's announcement of legal action against two shareholders who filed climate resolutions. Cynthia Hanawalt, director at the Sabin Center for Climate Change Law, warned that these legal threats pose a risk to shareholder rights. Loriot-Boserup advised investors to use their powers and adjust positions as needed, predicting increased interest in split voting solutions.
Research by ShareAction revealed that some CA100+ members repeatedly voted against resolutions flagged by the alliance. The absence of activist resolutions at this year's Exxon AGM has raised concerns about asset owners' influence over climate transition planning at oil and gas firms.
The departure of major asset managers from the stewardship coalition signals a shift in priorities. While some experts downplay the impact, others warn of threats to shareholder rights and influence. As Exxon's legal action against shareholders continues, the future of collective climate action remains uncertain.
