Bloomberg: Dutch pension fund PME is issuing a blanket warning to US money managers, amid concerns America’s investment industry is caving in to pressure from the Trump administration to abandon basic principles of stewardship.
They “aren’t condemning what Trump is doing and how he is operating and how he is handling issues like climate change and demolishing the judiciary,” Daan Spaargaren, senior strategist for responsible investing, said in an interview. “We are worried about that.”
PME, with assets under management of about €57 billion ($65 billion), is the latest in a string of pension funds in Europe to express such concerns. Earlier this year, State Street lost mandates in Scandinavia and the UK after it withdrew from a major climate alliance for the industry. PME has already made clear it’s reviewing a €5 billion mandate with BlackRock Inc., after the world’s largest asset manager quit a key net zero coalition. It expects to make a decision in the coming weeks.
“We are now looking at the equity portfolio, so currently it’s only BlackRock,” Spaargaren said.
BlackRock has said that it’s a “global leader” in sustainable and transition investing, and that it offers climate-focused clients in Europe a choice of products that deliver performance in line with their preferences.
Spaargaren says PME has come to the conclusion that “existing frameworks on benchmarking different asset managers — the old frameworks — are not working anymore.”
The administration of President Donald Trump has attacked the judiciary and is in the process of derailing America’s energy transition. It has also sought to wipe out diversity, equity and inclusion policies, dubbing these “illegal.”
It’s a political development that requires the investment industry to take a stand, Spaargaren said.
If asset managers “align their interests and their policies with the current administration in the US, then we are legitimizing also these steps and these practices by offering them our funds,” he said.
PME is now “evaluating” next steps, Spaargaren said.
The new filter will assess holdings based on parameters such as how well investments support good governance, freedom of association, as well as environmental considerations such as water scarcity. It will also automatically exclude passively managed equity investments in emerging markets because of the perceived environmental, social and governance risks.
Spaargaren says investors need to adapt to what’s become a fundamental split between values in Europe and those being promoted by the Trump administration.
