“Thereportfrom InfluenceMap — ‘Climate Funds: Are they Paris Aligned?’ — analysed 723 listed-equity funds with total assets under management of over US$330 billion, dividing funds which used one of 30 descriptions into two categories: broad ESG and climate-themed.

In the broad ESG category, Influence Map identified 593 equity funds with over US$265 billion in total net assets of which 71%, had a negative Portfolio Paris Alignment score.

Of the 130 climate-themed funds, with titles such as ‘low carbon’, ‘fossil fuel free’ and ‘green energy’, and over US$67 billion in total net assets, 55% had a negative Paris Agreement alignment score. The lowest score was — 42% with the best scoring fund hitting +90%.”

[COMMENTARY]Big players such as State Street, UBS, and even Blackrock, did particularly badly. I think that the report’s researchers are also somewhat off-base by not accounting for the highly differentiated objectives of these funds by exclusively focusing on whether or not they specifically align with the Paris Agreement.

For instance, if a fund’s objective is to purposely buy stocks in fossil fuel-related companies to encourage engagement with them to promote greater carbon reduction through new reduction methodologies or renewables, that would seem to put such funds at the low end of this analysis.
Most Green Investment Funds Missing Paris Goals, by ESG Investor, September 2, 2021, Regulation Asia, Singapore/Hong Kong.