General findings

The majority of asset managers continue to perform poorly on responsible investment. Over half were graded E or F, with only five managers meeting at least half of the 20 key standards. European managers significantly outperformed their North American and Asian peers, achieving over twice as many standards across all themes. The four largest asset managers—BlackRock, Fidelity Investments, State Street Global Advisors, and Vanguard—were among the lowest performers, collectively meeting only four of 80 possible key standards while managing over USD 23 trillion.

Progress has slowed since 2022, with few new commitments on coal, tobacco, or controversial weapons. Many managers still lack robust fossil fuel restrictions and biodiversity policies, and fewer than half of those with human rights commitments could provide an example of exclusion or escalation. Engagement remains the dominant approach, but escalation policies are often vague and lack timebound triggers.

Governance and stewardship

Governance and stewardship scores were higher than other themes, but gaps remain. While 61% disclosed detailed engagement activities, only 33% voted in favour of at least 85% of resolutions on environmental and social issues. Escalation policies became more detailed, with 78% including consequences such as divestment, though only 27% set timebound triggers. Disclosure has stalled, with quantitative engagement outcomes reported at similar rates to 2022. Asset managers are stepping back from divestment and public actions, favouring private engagement. European managers outperformed in applying stronger escalation actions.

Climate change

Ambition and action on climate remain inadequate. Two-thirds of managers committed to net zero by 2050, but only four met robust interim targets requiring a 50% reduction by 2030 covering at least half of assets under management. Restrictions on fossil fuels are weak: fewer than half of managers restrict even one type of fossil fuel across most funds, and only seven restrict conventional oil and gas. Despite commitments, major managers invested over USD 4.5 billion in fossil fuel bonds between 2023 and 2024.

Only 21% published transition plans, and just 22% had explicit targets for climate transition-related investments. Scenario analysis has become more common, with 84% conducting assessments, but only half used findings to guide investment. Few managers engage with companies on climate issues beyond disclosure, and escalation is limited.

Biodiversity

Biodiversity remains the weakest theme. More than half of asset managers failed to meet a single biodiversity key standard, and the median score was just 13%. Only 9% had timebound biodiversity targets, 5% restricted investments in key biodiversity areas, and 9% had sector-specific biodiversity requirements in at least two high-impact sectors. While 58% made no commitments to protect biodiversity hotspots, a small number showed leadership by using company-level location data and sector-specific restrictions.

Data gaps are often cited as barriers, yet few managers engaged companies to improve disclosure. Tools such as ENCORE are increasingly used, though uptake of spatially precise data tools like IBAT remains low.

Social

Most managers state a commitment to human rights, but robust implementation is lacking. Only 17% had investment policies considering Free, Prior and Informed Consent, and only 25% reported direct engagement with affected communities. Fewer than half excluded controversial weapons across most funds, and only 30% extended exclusions to nuclear weapons. Restrictions on tobacco were present in just 25% of managers’ funds, while very few addressed other social issues such as antimicrobial resistance or unhealthy food.

Although 88% referenced human rights frameworks, over half could not provide examples of exclusions or escalated action. Only 25% encouraged investee companies to adopt living wage policies. European managers showed greater willingness to act than peers in Asia or North America.