Responsible Investment Regression: Asset Manager Progress “Significantly” Slows
May 30, 2025
A report from NGO ShareAction has branded most asset managers’ responsible investment practice standard as “disappointing”, with progress having “slowed significantly” since 2022.
The report graded the responsible investment standards of 76 asset managers out of 100 across four key areas: biodiversity, climate change, governance and stewardship, and social issues. These organisations represented more than U$80 trillion in assets under management and included asset managers from Australia, Asia, Europe and North America.
Just two asset managers – Robeco and APG Asset Management – received an A grade, being given an overall score of 75% or more across the four categories. Only a further seven received a B grade, including AXA Investment Managers, Aviva Investors, Allianz Global Investors and BNP Paribas Asset Management.
The analysis noted that a handful of predominately European managers possess “robust policies and leading practices” for responsible investment, whereas many large US managers have seen progress stall.
The report’s worst performers include the world’s four largest asset managers – BlackRock, Fidelity Investments, State Street Global Advisors and Vanguard which cumulatively representing over U$28 trillion in assets under management – were all graded E or F. In total, 38 of the 76 asset managers scored received an E or F grade.
Despite this poor performance according to ShareAction, Minerva reported in December that 11 US states had filed a lawsuit against BlackRock, State Street and Vanguard accusing them of using proxy voting and other actions to pressure some of the largest US coal producers to accommodate to green energy goals.
“We are seeing progress stagnate on responsible investment at a time when rapid action is needed,” said Claudia Gray, Head of Financial Sector Research at ShareAction. “If the financial sector keeps failing to address climate change, nature loss and social inequality, there will be considerable economic consequences, threatening the safe and healthy world we all want to live in.”
Of the four categories, asset managers scored most strongly on governance and stewardship, which represented 20% of the score’s overall weighting. The majority of asset managers performed worst on biodiversity, which comprised 25% of the score while social represented 25% and climate 30%.
However, the report stated that asset managers are failing to make good use of governance and engagement practices to improve responsible investment.
While 61% of the asset managers offered detailed disclosure of engagements, just 21% disclosed sustainability or impact metrics to clients across all portfolios. Additionally, just a quarter had an engagement policy with a defined escalation process that time-bound escalation triggers and consequences of unsuccessful engagement.
“Escalation policies have generally grown more detailed since 2022, but they are still missing a key element: timebound triggers,” the report read. “Detailed escalation policies are vital to increase transparency and accountability, both between asset managers and investee companies and between asset managers and their clients.”
Asset managers were also found to have stepped back from divestment and public actions on engagement since 2022. Twenty-nine of the 69 managers featuring in both ShareAction’s 2023 and 2025 surveys reported using total or partial divestment as part of their engagement process in the latest survey, down from 38 two years ago.
The report added there has been a decrease in the number of asset managers making public-facing statements and asking questions at AGMs, despite private engagement actions such as meetings and letters remaining consistent.
In ShareAction’s 2023 survey, more than 50% of asset managers made public facing statements and over 30% posed questions at AGMs. In the NGO’s new survey, this dipped below 40% for the former and fell to 20% for the latter.
The report makes recommendations for asset managers, asset owners and policymakers. For governance and stewardship, the report suggests asset managers should disclose impact metrics to clients across all portfolios, set an engagement policy with a defined escalation process, timebound escalation triggers and consequences of unsuccessful engagement, and offer detailed disclosure of engagements.
For asset owners, the report recommends requiring asset managers to regularly report on how responsible investment issues are being managed at all stages of the investment process, including case studies, and to engage with asset managers when expectations are not met.
“Asset owners need to push asset managers to secure their long-term interest,” said ShareAction’s Gray. “At this critical time, they must keep the pressure on their managers to take the steps needed to protect people and planet for generations to come, even if it means ending relationships with firms who fail to meet their expectations on responsible investment.”
The report also urged policymakers to grant regulators “clear” supervisory and enforcement mandates, including penalising poor performance on responsible investment practices, such as responsible investment policies, sustainability disclosures, and stewardship.
A spokesperson at Fidelity International, which was ranked 25th out of the 76 asset managers, told Minerva: “Sustainable investing is an integral part of approach as a company; we believe that by investing in companies which operate with high standards of sustainability we can protect and enhance investment returns for all of our clients.
“We believe that voting can be an effective way to encourage companies to improve their management of material sustainability risks and opportunities. Therefore, we support shareholder proposals that we believe are well-formulated and have the potential to improve company practices in these areas.”
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Last Updated: 30 May 2025