British funds tell Texas: emission-cut vows matter for our reputation

Smoke rises above a manufacturing facility at sundown in Rugby, Britain February 10, 2021. REUTERS/Matthew Childs/

Might 12 (Reuters) – Two massive British asset managers have defended their efforts to scale back emissions to Texas officers and mentioned their companies may face reputational dangers if they didn’t comply with by way of on carbon-cutting commitments.

The letters from Man Group PLC (EMG.L) and from abrdn plc, (ABDN.L) reviewed by Reuters following a public data request, are in response to a brand new state regulation in Texas that claims that firms discovered to be boycotting the fossil gasoline business may very well be barred from operating pension fund cash within the state.

Many monetary executives have pledged to push for greenhouse gasoline emissions cuts by portfolio firms. However that has drawn the ire of U.S. Republicans, who say they’re imposing environmental restrictions on debtors exterior of regular coverage channels. Few main asset managers have adopted some universities in divesting from fossil fuels outright. learn extra

At stake with the brand new Texas regulation are property together with $1.4 billion that Man Group of London runs for the Trainer Retirement System of Texas, and $59.7 million the system has with abrdn of Edinburgh, previously Customary Life Aberdeen. learn extra

Whether or not they can preserve that cash is partly as much as Texas Comptroller Glenn Hegar, who in March started sending out data requests to some 158 firms, with responses due from this month. learn extra

The letters from Man and abrdn mark the primary detailed responses from main firms to Hegar’s request which were made public.

Each Man and abrdn wrote that they don’t have firmwide restrictions towards investing in power firms and usually are not boycotting them.

Fairly, requested in the event that they dedicated to environmental requirements past federal or state legal guidelines, Man and abrdn described their membership within the Web Zero Asset Managers Initiative.

Signatories, together with a lot of the world’s prime fund companies, decide to urgent firms of their portfolios to realize internet zero emissions by 2050 or sooner to restrict world warming. learn extra

Man and abrdn famous the hassle didn’t require them to divest from fossil fuels.

As an alternative, the businesses mentioned, they may see their good names tarnished if they didn’t ship emissions cuts because the voluntary business group seeks.

“We’d be uncovered to reputational dangers if we don’t fulfil our commitments,” abrdn wrote within the letter dated April 28.

An abrdn consultant mentioned executives weren’t obtainable to remark additional.

The same letter from Man Group despatched April 19 states it may very well be tossed out of the initiative if it doesn’t meet its targets.

“This will have reputational, company rankings and/or client-related penalties for Man Group. There are, nevertheless, no authorized or direct financial penalties of not fulfilling its commitments beneath the initiative,” based on the letter.

Man declined to remark additional.

A spokesman for Hegar mentioned he wouldn’t touch upon the responses. The objective is to create a listing of firms discovered to be boycotting the fossil gasoline business by Sept. 1, mentioned the spokesman, Kevin Lyons. Corporations on the checklist may then be barred from operating public pension fund cash in Texas.

Reporting by Ross Kerber in Boston, extra reporting by Simon Jessop in London, Modifying by Rosalba O’Brien

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