And activists are getting closer to the centers of power. In May, a tiny investment fund agitated for change at the western world’s biggest oil explorer -- Exxon Mobil Corp. -- and won. Despite such progress, though, greenhouse-gas emissions rose this year.
The Great Bounceback
Though ESG is supposed to be about more than just the environment, 2021 was dominated by headlines about climate change. A recent survey by Macquarie Asset Management showed that 55% of real asset investors identified climate change as the ESG risk they give the highest priority. By comparison, just 5% said their main focus was on diversity and inclusion.
Even so, companies faced more pressure from shareholders in 2021 to improve their social records. After a record proxy season, investors plan to file resolutions in 2022 pressing companies on everything from racial audits to worker issues at Amazon.com Inc.
Bioy said part of the challenge for fund managers is that companies in their portfolios either aren’t doing enough to boost their climate and social credentials, or if they are, they don’t have the data to show it.
“Asset managers are working with what’s available,” she said. “There aren’t that many companies that have committed to net zero, there aren’t that many companies that are on the pathway to net zero. There aren’t that many green companies to start with.”
If the end goal is to do good, then a smart ESG strategy isn’t going to be enough, Bioy said. “It is holding those asset managers accountable for the claims they make, so we stop talking about greenwashing,” she said.
This article was provided by Bloomberg News.