J.P. Morgan AM Leaves CA100+

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    Stockholm (NordSIP) – Climate Action 100+, the world’s largest investor-led engagement initiative, continues to shed members. Earlier this week, J.P. Morgan Asset Management (JPMAM) confirmed that the firm had decided to leave the coalition. Boasting more than USD 3 trillion in assets under management, JPMAM is the most significant member so far to exit CA100+.

    The decision comes at the back of another three asset managers discontinuing their membership almost simultaneously in August last year: Loomis Sayles, an affiliate of Natixis Investment Management with USD 310 billion in AuM, Walter Scott Asset Management, a subsidiary of BNY Mellon Investment Management, with USD 81 billion in AuM, and PanAgora, an independent asset manager with USD 32 billion in AuM.

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    According to a spokesperson for JPMAM, the choice not to renew the membership in CA100+ comes in recognition of the significant investment the asset management firm has made in its “investment stewardship team and engagement capabilities, as well as the development of its own climate risk engagement framework over the past couple of years”.

    “The firm has built a team of forty dedicated sustainable investing professionals, including investment stewardship specialists who also leverage one of the largest buy-side research teams in the industry,” explains the spokesperson. “Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”

    As CA100+ is coming of age, frustration with the insufficient results achieved through collective action seems to be brewing. In 2022, rather than rounding up the initiative that originally was supposed to last only five years, CA100+ consulted its signatories on extending the deadline to 2030. Given the mounting criticism, however, it was obvious that the organisation was due for a serious revamp. ShareAction, among others, argued in a report published at that point that there was little evidence the signatories have succeeded in realising the goal of using investor influence to ensure that the world’s largest corporate greenhouse gas emitters take necessary action on climate change.

    Recognising the need to change, in June last year, CA100+ announced the launch of a new phase, supposed to shift the focus from corporate climate-related disclosure to the implementation of climate transition plans. The measures taken were, however, not enough to dissuade some members from withdrawing their support.

    Of course, for some asset managers, particularly those operating in the US, the decision to disengage from collaborative action could also be motivated by fear of legal consequences, given the persistent anti-ESG movement in some states. The way CA100+ operates should, in theory, protect its members from antitrust accusations. Yet, the US House judiciary committee has previously subpoenaed a representative of the initiative as part of an investigation into sustainable investing.

    It is worth noting that despite the exit of several high-profile asset managers, CA100+ continues to attract new signatories. Some sixty members have joined the initiative since June 2023. Many seem to believe that collaborative engagement is a vital part of global efforts to transition towards a low-carbon economy and help mitigate the worst effects of climate change. However, it remains to be seen whether current practices and structures are up to the task.

    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.
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