Just a single US asset manager will be recognised for running an environmentally-friendly equity fund at the third CDP Europe Awards hosted by the European Central Bank on Tuesday.
Washington-based Fisher Investments joins 15 European asset managers winning accolades for top environmental funds. Amundi, Candriam, La Banque Postale Asset Management and Robeco each received two awards based on scores for investing in green technologies and tackling climate change, water security and deforestation.
Twenty top environmental performers were identified from 20,000 US, European and Asian active equity funds with combined assets of €16.8tn by Climetrics, a fund-rating service developed by the non-profit Carbon Disclosure Project and ISS-ESG, a division of the proxy adviser Institutional Shareholder Services.
Climetrics also assesses governance of climate issues, investment policy as well as individual portfolio holdings. It then awards a green “leaf” rating from one to five to rank funds.
Nico Fettes, head of Climetrics, said any investor could access the free-to-use database to help them choose leading environmental funds.
“We urgently need a faster shift in capital towards companies with sustainable business models,” said Fettes.
Funds offered by Allianz Global Investors, Aviva, HSBC, La Banque Postale and OFI were judged best in class in the European category. Axa IM, Candriam, Handelsbanken, Schroders and Sycamore were top performers in the global category.
A total of 550 funds in the global and European equity categories were judged as five-leaf products.
No US or emerging market funds received five leaves. Four European managers — Amundi, Candriam, Erste and La Banque Postale — performed strongest in the US equity funds category. Climetrics said EM funds run by Fisher, Federated Hermes, Nordea and Robeco had the best green credentials.
About 10 per cent of the 20,000 funds analysed received just one leaf.
Investor demand for green products accelerated sharply last year. Net inflows into sustainable funds sold in the US more than doubled from $21.4bn in 2019 to a record $51.2bn last year, according to Morningstar, the data provider. Assets held in US sustainable funds reached $236bn in December, up 72 per cent over the previous 12 months.
Demand for sustainable funds in Europe was far stronger with investor inflows almost doubling last year to $273bn, pushing assets to a record $1.3tn.
New European rules, known as Sustainable Finance Disclosure Regulations, come into effect on March 10. These will require asset managers to provide more information about ESG risks and targets and to explain how these are assessed and monitored.
Managers will also have to explain how well their investment strategy marries with relevant sustainability indicators, such as temperature increases.
“The new rules will provide investors with welcome protections against greenwashing,” said Hortense Bioy, a sustainability research director at Morningstar.