In 2025, some European and North American asset owners took unprecedented action to encourage their external asset managers to better manage climate-related risks. These initiatives are essential at a time when asset manager’s massive support for fossil fuels continues and even intensifies, fuelling an ever more threatening climate crisis. However, the majority of asset owners remain too silent. Reclaim Finance reviews the examples to follow and calls on all asset owners to strengthen their engagement and climate criteria for selecting external managers, in line with their fiduciary duty.
Asset owners have a clear fiduciary obligation: to act in the best interests of their beneficiaries and/or clients, both today and in the long term. Climate change is one of the main threats to the economy. Global warming could cause a 50% loss in GDP between 2070 and 2090 [1], and a 40-50% drop in the value of global equities by mid-century [2]. Beyond these economic considerations, every fraction of a degree of additional global warming leads to a deterioration in living conditions.
Asset owners therefore have a significant responsibility to reduce climate risks and impacts. In particular, they can use their influence as clients to encourage their external asset managers to step up their climate action across all assets under management. This requires looking beyond the mere application of each asset owner’s climate commitments to delegated assets.
Asset managers exacerbating climate risks and impacts
Most large asset managers have disastrous climate practices, undermining the efforts of their asset owner clients committed to the transition.
A recent study published by Reclaim Finance shows that most large managers continue to provide massive support to companies developing fossil fuels. The 30 managers assessed invested at least $16.9 billion in bonds recently issued by the largest fossil fuel developers. Some, such as BlackRock and Amundi, even increased these investments compared to the previous year. And 81% of these managers’ votes approved the actions of these companies’ boards of directors, supporting their fossil fuel expansion plans.
Several managers have also left international climate alliances such as Net Zero Asset Managers (NZAM), recently relaunched with weakened requirements, or the Climate Action 100+ (CA100+) initiative, sending a negative signal about the continuation of their already insufficient climate action.
Selecting external managers based on robust climate criteria
In 2025, several asset owners withdrew mandates from asset managers due to sustainability concerns. Dutch pension funds PFZW and PME withdrew mandates from BlackRock, while the UK’s The People’s Pension and Denmark’s Akademiker Pension did the same for mandates entrusted to State Street. In France, Préfon delisted 13 funds from its range of unit-linked life insurance products, including a BlackRock fund [3]. Several press articles have indicated that other changes of managers have also taken place without public communication.
Across the Atlantic, former New York City Comptroller Brad Lander recommended that three city pension funds end their relationships with BlackRock due to its inadequate climate strategy [4].
Some asset owners publicly disclose their climate selection criteria, thereby avoiding having to break with certain managers afterwards. For example, French insurer MAIF no longer entrusts new investments to managers who have not defined a strategy for phasing out thermal coal by 2030 [5]. Also, last April, the New York City pension fund controller published a list of climate expectations for managers, which will be used as a basis for appointing new managers for upcoming mandates [6].
These initiatives are a step in the right direction, but they need to be multiplied in order to have a real impact on asset managers.
Encouraging asset managers to change through active dialogue and progressive escalation
Some asset owners have initiated dialogue with their external managers. In February 2025, a coalition of asset owners representing £1.5 trillion in investments issued a statement calling on their asset managers to develop a robust engagement strategy to address climate risks [7]. Last August, the finance officials of 17 US Democrat states asked major US managers to reaffirm their commitment to managing climate risks [8]. More recently, 42 asset owners called on managers to join the Net Zero Asset Managers alliance [9].
These initiatives are welcome, as the influence of asset owners is strengthened when exercised publicly and collectively. However, it is essential that the dialogue focuses on demands for concrete action by managers, such as ending fossil fuel investments, and not just on general principles or membership of climate coalitions, whose requirements are often weak.
Furthermore, without sanctions planned, the dialogue risks being unsuccessful. To be credible, asset owners must adopt a clear escalation strategy, indicating to managers that they will only be entrusted with new assets if they comply with their climate criteria.
In the face of climate risks, asset owners must use all the levers at their disposal, including their influence over asset managers. Their asks must focus primarily on ending support for fossil fuel expansion, both through new investments and votes in favour of management-proposed resolutions.
