On Wall Street and most other streets, money talks. If you watch CNBC and other shows about the stock market, when they interview do, the person’s name, position and AUM are identified. The AUM is the assets under management, in theory the greater the number the higher influence the person has. In reality, the larger the fund, the more it functions similar to an index fund. Most fund managers have 30 stocks, not all of them will be beat the market or index but a few should. The ones under a billion under assets can be more easily be identified as actively funded.
In an article from Reuters, the Institutional Investors Group on Climate Change, have given notice to companies around the world that they had better have a climate change plan and equally important how is to be implemented. The 53 asset management companies include: UBS Asset Management, DWS, Legal & General Investment Management (many of them are based in Europe). The asset managers own stock and besides making a profit, companies are expected to have active climate reduction plans.
Linking to dividend paying stocks, at the Annual General Meetings we saw large asset managers vote for Board Members who represent climate change in the big energy companies. The statement from the Institutional Investors takes the step beyond the energy companies to the rest of the market. Institutional Investors tend to be the pension funds, retirement funds, or funds with a very long term focus, if a company does not have an active climate reduction plan, the Board Members will be changed.
There are more questions than answers, till the next time – to raising questions.