Two major US-based investment groups – Fidelity and JP Morgan Asset Management – have signed up to responsible investments bodies.
First: Fidelity Investments, the fourth largest mutual fund and financial services group in the world with $2.1trn in assets under management, has become a signatory to the Principles for Responsible Investment (PRI).
The Boston-based investment titan – founded in 1946 – has around 45,000 employees and was one of the few remaining “mainstream” firms that hadn’t signed up to the PRI, the United Nations-backed body that now has 1,693 signatories.
Fidelity signed up on February 23, according to the PRI’s signatory directory.
The firm has been upping its profile in responsible investment recently; indeed it currently has a vacancy for an ESG Analyst on the Responsible Investor jobs site.
It has backed calls for binding votes on pay and was involved in the corporate governance spat at Swiss chemicals firm Sika. On top of that it is backing the Investor Forum in the UK – where Simon Fraser, the ex-CIO of Fidelity Worldwide Investment, is chair.
But Fidelity has been highlighted by Preventable Surprises as being one of the big managers to vote against the Exxon/Chevron climate resolutions last year as well as being named as a “carbon hypocrite” by campaign group As You Sow. A spokesperson for the PRI said “we have seen momentum around sustainable investing increasing in the US” over the past few months.
Meanwhile, JP Morgan AM has become a member of the Institutional Investor Group on Climate Change (IIGCC) – a London-based NGO representing European investors who want to address climate change risks and opportunities.The funds house, part of the wider JPMorgan Chase group headed by CEO Jamie Dimon, has around $1.7trn under management.
The move comes hot on the heels of three other firms signing up to the body in recent weeks. HSBC Pension Fund Trust, which made headlines last year when it reallocated its entire default defined contribution scheme to a climate-tilted index signed up to the group, as did Denmark’s PFA, which is already a member of the Carbon Disclosure Project. Finally, Hartree Partners – an oil, commodities and equities trader formerly known as Hess Energy Trading Company, until Hess sold its stake in 2015 – has also committed to the IIGCC.
Similarly to Fidelity, JP Morgan AM has strong corporate governance credentials, with the Stewardship Code and PRI signatory having for example voted against the re-appointment of James Murdoch as chairman at Sky plc.
But Dimon caused a storm in 2015 when he tore into shareholders who rely on proxy firms such as Institutional Shareholder Services (ISS) and Glass Lewis.
And campaign group Rainforest Action Network recently called out the investment giant for, in its words, “propping up” a new coal plant in Poland despite having committed to not financing new coal power.
In 2014, JP Morgan was subject to a shareholder resolution from Walden Asset Management, Zevin Asset Management and a range of faith investors over its lobbying expenditures, not least its support of the US Chamber of Commerce – which the investors said “actively lobbies against legislation and regulations on climate change while the bank has a strong environmental policy”.