EMBARGOED UNTIL THURSDAY JANUARY 27 10:00 AM GMT
French asset management giant Amundi is under pressure over its performance on climate change, after campaigners cautioned that its recent takeover of Lyxor could see its fossil fuel holdings boom. The warning came in a report by Paris-based NGO Reclaim Finance (1), which found that Amundi’s assets not covered by coal restrictions are set to leap by a whopping 84% following the purchase. Amundi, Europe’s largest asset manager, also came under fire for its support for oil and gas developers, blatantly contradicting its positioning as a sustainable finance leader.
Earlier this month Amundi completed its purchase of Lyxor, making it the second biggest ETF provider (2) in Europe, after BlackRock. The acquisition will see Amundi continue the meteoric rise of its so-called ‘passive investments - a key source of its holdings in polluting companies – from €282bn today to €420bn by 2025 (3). Campaigners warn that without action Amundi risks becoming the holder of last resort for coal developers such as Glencore and KEPCO (4), as Amundi has failed for two years to apply its coal policy to its passive holdings.
The support is matched at the boardroom level. New Reclaim Finance analysis shows that Amundi voted in favor of 78% of the resolutions proposed by the management of thirteen big coal developers. Among those supported was Glencore, despite the mining giant’s commitment to continue its coal operations beyond 2050 (5).
Lara Cuvelier, sustainable investment campaigner at Reclaim Finance, said: “If Amundi really wants to be a climate leader, it needs to fix its passive problem, stop supporting the expansion of fossil fuels and get tough with Big Polluters.”
The findings of the report are in stark contrast to Amundi’s self-image as a sustainable finance leader. The asset management joined the Net Zero Asset Managers’ initiative in July (6), at the same time setting itself a target of reaching net-zero by 2050 and cutting its CO2 emissions in half by 2030. Moreover, its president, Yves Perrier, was appointed in November by the French government to lead French financial institutions in working towards alignment with the Paris climate goals.
Yet the asset management giant has no rule in place to prevent supporting oil and gas expansion, the red line established by the IEA’s Net Zero Roadmap. The report reveals that Amundi held more than €14bn worth of shares and bonds in the six European oil and gas majors as of January 2022. Its latest climate policies still allow it to support a large majority of the expansion plans (nearly 75%) of oil and gas companies and fail to tackle the billions it funnels oil and gas development in the Arctic zone (7).
Cuvelier concluded, “Amundi might be a poster boy for the French financial sector on climate, but its record is nothing to be proud of. Committing to net-zero while actively supporting oil, gas and coal developers is like buying more cigarettes while promising to give up smoking. It’s time for Amundi to live up to its word and start leading by example on climate.”
Notes:
1. The full report is available in French here, entitled Amundi: enquête sur un géant de l’investissement. An English-language executive summary is available on request.
2. An Exchange Traded Fund (ETF) is the most popular type of passively managed product. Lyxor managed 67% of its assets via ETFs.
3. The report reveals that Amundi’s passive holdings have already increased by over 300% since 2018.
4. Amundi’s coal policy is not applied to all its passively managed assets. It currently covers only its ESG index funds and Amundi recently announced a goal of 40% of its ETF range to be made up of ESG ETFs by 2025.
5. Scope of 13 coal developers analyzed by Reclaim Finance as part of an analysis (Dec 21) on credible transition plans, including that of Glencore.
6. Amundi is also member of over a dozen international investor initiatives on climate.
7. See Reclaim Finance report (Sep. 21) on oil & gas expansion in the Arctic, and the financial institutions backing it.
Media Contacts:
Lara Cuvelier, Sustainable Investment Campaigner, lara@reclaimfinance.org, +33 6 68 45 18 93
Angsu Satow, Media Manager, angus@reclaimfinance.org, +447847754046