Some asset managers who are members of the Net Zero Asset Managers’ initiative (NZAM) have increased their overall shareholdings in 15 of the world’s largest listed oil and gas companies according to research from Carbon Tracker.
A report, Missed Pitch, found that BlackRock, Capital Group and Amundi have “doubled down on oil and gas” in 2022 and significantly increased their overall shareholdings in the 15 companies which include ExxonMobil, Chevron and TotalEnergies.
Carbon Tracker is a team of financial specialists who have produced research on unburnable carbon and stranded assets in order to align the financial system in the transition to a low carbon economy.
They identified the top 20 shareholders in each of the 15 major oil and gas companies and found they included 90 asset managers of which 25 were members of NZAM. The researchers then analysed the position of each asset manager across each company (see chart at foot of post).
Maeve O’Connor, associate analyst, oil, gas and mining and author of the report, said in a statement, “Asset managers that join coalitions such as the Net Zero Asset Managers Initiative are signalling to the market that they will invest in line with the Paris target of holding global warming to 1.5°C.
If they invest in oil and gas companies that are not aligned with this target, they risk their reputation among climate-conscious asset owners while other investors may increasingly be concerned over exposure to energy transition risk.”
NZAM has 301 signatories with $59 trillion in assets under management. However, the report said that 25 NZAM members are among the biggest shareholders of the 15 major oil and gas companies who are not aligned with the Paris climate target.
In addition, more than 160 funds marketed with the labels “ESG”, “sustainable”, “climate”, “carbon” and “transition” hold $4.6 billion of investments in these companies.
“For example, BlackRock’s ACS Climate Transition World Equity Fund claims to invest in companies “well-positioned to maximise the opportunities and minimise the potential risks associated with a transition to a low-carbon economy”, but it has $219m in 10 of the 15 oil and gas companies,” said the report. “Shares in the 15 companies make up 35% of the investments in another BlackRock “ESG” fund: iShares V Plc – MSCI World Energy Sector ESG UCITS ETF.”
Carbon Tracker continued that some asset managers argue that holding shares in oil and gas companies enables them to play an active role influencing their climate behaviour. However, their research found that NZAM members do not vote in favour of resolutions relating to the energy transition much more often than non-members.
Mike Coffin, Head of Oil, Gas and Mining at Carbon Tracker and report co-author, said in a statement that growing numbers of investors want to support the energy transition from fossil fuels.
Coffin added: “However, it’s hard to see how they can do this with credibility if they own financial interests in oil and gas companies that are not themselves aligned with the Paris target.”
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