‘Neglecting climate is fiduciary failure’: Investors pressure policymakers to protect ESG

Freedom to Invest Responsibly statement has been signed by more than 250 firms

Franklin Templeton, Boston Common Asset Management and Impax Asset Management are among more than 250 investors and companies calling on policymakers to “protect the freedom to invest responsibly in light of a political backlash against sustainable investment and business practices”.

In a statement, Investors and Businesses Call on Policymakers to Protect the Freedom to Invest Responsibly, firms are reminding policymakers they must be free to consider all material financial risks and opportunities, including those related to the climate crisis.

“Neglecting the robust economic benefits of the clean energy economy — and the substantial public and private investment opportunities that are necessary to achieve this shift — would represent a failure to build a stronger, more resilient US economy and a betrayal of the interests of our stakeholders, shareholders, beneficiaries, customers, and the communities where we do business and live,” the statement said. 

The statement comes as as legislative efforts aimed at restricting sustainable investment opportunities and banking practices are considered in states across the US.

Speaking to ESG Clarity about the statement, Ally McDonald, CEO of Boston Common Asset Management, said: This backlash on what we do and have always done is a shame. We are wasting our time fighting a political and ideological war, meanwhile our climate is in crisis. There are fires burning on every continent and we are hurtling toward a point of no return.”

“We will continue to participate and use our investor voice in every available avenue to make it clear that integrating ESG into investment decision-making is not only good for society, it’s simply good business.”

Signatories to the statement are part of a larger movement of leaders redirecting the national dialogue to focus on the financial implications – both risks and opportunities – tied to climate progress and the benefits of climate policies.

“If we don’t pay attention to the accelerating frequency of severe weather disasters and the hundreds of billions of dollars they cause, nor to scientists’ forecasts for severe risk of more of that, and to entrepreneurial companies’ innovations for solving the resulting market needs, then we are not fulfilling our fiduciary duty,” said Anne Simpson, global head of sustainability at Franklin Templeton.

Kirsty Jenkinson, investment director, sustainable investment and stewardship strategies CalSTRS, added: “Investment professionals assess all risks and opportunities facing their portfolios, such as interest rate changes, supply chain disruptions and damages from extreme weather events.

“To ask us to ignore pervasive risks such as the market disruptions caused by climate change and to ignore investment opportunities in the transition to a low-carbon economy is asking us to stop doing our jobs.”