Investment firms and asset managers do not have the power to address global climate change risks, according to French asset management giant Amundi.
The €1.3trn asset manager was responding to a European consultation about integrating sustainability into the UCITS funds regime and the Alternative Investment Fund Managers Directive (AIFMD), which face review under the European Commission’s Action Plan on Sustainable Finance.
The Paris-based firm takes issue with the European Commission’s statement that the financial system has a role in dealing with the “catastrophic and unpredictable effects of climate change” and says that the focus should be on industrial firms.
“It is not in the power of investment firms and asset managers to address these global risks and policy makers or governments cannot discharge their responsibility in this field via the medium of financial regulation,” it says in its submission.
“Rather, regulation aiming at reducing these risks must address directly those who are responsible for contributing to climate change or societal ills i.e. above all industrial corporates.”
The submission was among several released today by the European Securities and Markets Authority (ESMA), which is consulting on integrating sustainability risks and factors in the investment services directive MiFID II, and in the UCITS and AIFMD directives.
Noting how Amundi has 17 analysts dedicated to ESG issues and 35 SRI fund managers, making it “one of the leading asset managers, if not the first, in terms of ESG integration”, the firm says there’s “a gap has to be filled in terms of driving long term savings towards sustainable finance and, in a wider perspective, long term investments”.It says the European Long-term Investment Fund (ELTIF) regulation “was created with this objective but it did not reach the goal”.
“There is a need,” Amundi says, “for a long-term fund better fitted to retail investors a part of which would be kept for climate transition, specific environment investments or else social care”.
“It is not in the power of investment firms and asset managers to address these global risks”
The firm argues that sustainability “is much more a factor to take into account at a macro level than a risk at micro-economic level”.
It goes on: “We consider that sustainable investment must be seen as a proactive orientation which has to be encouraged instead of focusing on fear that the risk linked to any environmental breach could occur.
“Therefore we consider that regulation can positively influence sustainable factors through better taxonomy applied to industrial activities and should only oblige investment firms to take into account breaches from issuers or borrowers (Corporates) in the field of environment and of climate change.”
The full range of responses to the consultation, which opened in December last year, is available here.