The low standard of responsible investment practice by most asset managers is shocking and disappointing.

Asset managers shape the world we live in through the companies they invest in. Our research shows that most of the largest players in the market are failing to invest responsibly, continuing to pave the way for fossil fuel expansion, nature loss and the proliferation of controversial weapons. As middlemen in the financial sector, their irresponsible investments are being made almost entirely with other people’s money.

We set 20 basic standards that we expect asset managers to achieve, from net zero targets to local community engagement. Every standard is met by at least one asset manager., but the majority of asset managers fail to meet half of these standards.

Only a few industry-leading asset managers are demonstrating robust approaches to responsible investment. Asset owners who care about long-term outcomes - such as pension funds - should take note, while policy makers need to provide regulatory environments that ensure a safe and healthy world.

Every asset manager* that had a commitment on coal or tobacco in this year’s survey already had one in our 2023 report. Only four additional firms have made commitments to restrict at least some form of controversial weapon since 2023, compared with 11 that made such commitments between our 2020 and 2023 surveys. Similarly, only six have introduced biodiversity requirements into policies for material sectors (such as agriculture, mining, or fisheries) since 2023, compared to 19 in the preceding period.

Coal is the single most carbon-intensive energy source, yet less than half of the asset managers have any coal restriction across the majority of their funds. Far fewer have restrictions for unconventional fossil fuels (oil sands, Arctic oil & gas, fracked oil & gas, and ultra deepwater oil & gas) across the majority of their funds. Only four have sufficiently strong restrictions on coal, unconventional oil & gas, and conventional oil & gas.

The most common sector policies are still for agriculture and forestry, with many asset managers failing to publish a comprehensive biodiversity-related policy for the mining sector, fisheries or aquaculture, and the (agri)chemicals sector. The small number of asset managers that incorporate nature-related risks and opportunities into these sectors is concerning given the high impacts that these industries have on biodiversity.

Controversial weapons include anti-personnel landmines, cluster bombs, chemical weapons, and biological weapons, all of which can cause indiscriminate harm and are therefore proscribed by several international treaties and agreements. Less than half the managers exclude all these controversial weapons from a majority of their funds; in other words, they can permit new investments in companies which manufacture these weapons.

Even fewer have any form of exclusion on companies manufacturing nuclear weapons, and these restrictions do not usually apply to the production of warheads for the US, UK, or France.

*Of the 60 asset managers that have featured in all of our last three assessments.