Esg funds freeze, quarterly inflows plummet from 160 billion to 10 billion in three years

Already the year after the Scottish Cop, the first exits from the networks began. Although it was not motivated by anti-Esg pressure from the Republicans, Vanguard in December 2022 announced its farewell to Nzam. "After extensive reflection," Vanguard explained, "we have decided to exit Nzam in order to provide the transparency our investors demand on the role of index funds and our positions with respect to material risks, including climate-related risks, while emphasising that our firm takes an independent view on issues relevant to its investors. A statement that caused a stir also because, at the same time, BlackRock confirmed its membership in Nzam where it remains today. Vanguard, on the other hand, has never been part of CA100+.

Just two months after Vanguard's farewell in February 2024, there was a flurry of exits from CA100+: JpMorgan AM, State Street, Pimco. The latter manages USD 2 trillion, is part of the Allianz Group, and at the time of its exit from CA100+ announced that it was 'regularly reviewing our external initiatives and we have concluded that our participation in CA100+ is no longer in line with Pimco's approach to sustainability'. The most recent farewell among the US asset management bigwigs was that of Goldman Sachs AM ($2.6 trillion under management) which left CA100+ last August and at that time made it known that: "We have invested in our ability to meet the sustainable investment needs of our clients and we remain committed to leveraging our global capabilities." The asset management division of investment bank Goldman Sachs and Pimco are also absent from Nzam where Jp Morgan AM and State Street Global Advisors are still present. Goldman also announced on Friday that it had exited the Net Zero Banking Alliance.

Then there is the BlackRock chapter. The world's largest asset manager, led by Larry Fink, was one of the first to join Nzam, even on 29 March 2021, even before the network's official presentation at Cop26 in Glasgow. Conversely, last February, when there was an avalanche of exits from CA100+, it chose to stay with the International division. In a lengthy statement, the American asset management bigwig explained that 'due to changes in CA100+'s strategy, we are transferring our interest in CA100+ to BlackRock International and BlackRock Inc will no longer be a signatory. The money managed by BlackRock is not ours, but our clients', and BlackRock is committed to offering clients around the world a choice of investment objectives. Most of our clients who have set net zero targets for their organisations are clients of our international business (BlackRock International)'.

In the Old Continent, where the Esg sensibility is more pronounced, the number one asset manager (with more than EUR 2 trillion in assets under management) is the French Amundi present in both organisations: it joined Nzam in July 2021. The same goes for another big name such as Ubs AM, with over a trillion dollars in assets under management, which is present in both Nzam and CA100+.

"In Europe, ESG regulation is increasingly stringent and the landscape is completely different from that of the United States, where political speculation is creating pressure to the contrary," says Leonardo Becchetti, chairman of Etica Sgr's ethics committee. "Extreme weather events represent a real risk that central banks, such as the ECB, are asking intermediaries to consider and price with higher rates and lower credit probability for the most exposed companies in order to reduce the risk of non-performing loans. The climate emergency is not a fad and requires finance to react to reduce this source of risk'.