Sierra Club Endorses Report Revealing Pension Funds Failing to Stop Asset Managers Backing Fossil Fuel Expansion

PARIS - Pension funds and other asset owners are exposing clients and beneficiaries to growing climate-related financial risks by failing to stop asset managers supporting fossil fuel expansion, according to new analysis published today by Reclaim Finance and endorsed by AnsvarligFremtid, Fossielvrij NL, Sierra Club, SOS UK, and Urgewald.

• Read the analysis: https://reclaimfinance.org/site/en/assessment-of-the-climate-practices-of-asset-managers/

Reclaim Finance found that 30 of the biggest U.S. and European asset managers held almost $17 billion (USD) in bonds newly issued by fossil fuel developers. And while many asset owners say they engage asset managers to improve their climate practices, asset managers continue to support the expansion strategies of fossil fuel developers when they vote in favor of their management at annual general meetings (AGMs). Reclaim Finance and partners are urging asset owners to make their choice of asset manager conditional on ending support for fossil fuel expansion.

"Climate change poses a systemic risk to the entire economy and to the retirement security of millions of workers, and asset owners cannot protect portfolios if their asset managers are not prepared to confront that risk. If asset managers cannot provide credible plans to confront the climate crisis and steward investments responsibly, pension funds and other asset owners have an obligation to move their money to managers who will. Doing so sets a powerful precedent for other asset owners around the world: Asset managers who fail to take climate risk seriously should expect to lose clients to those that do better," said Ben Cushing, Director of the Sierra Club's Sustainable Finance campaign.

An assessment of 30 of the biggest U.S. and European asset managers found that the majority continued to make substantial investments in bonds issued by fossil fuel developers from January 1, 2024 until June 30, 2025 (2). Some asset managers, including BlackRock and Amundi even increased their fossil fuel holdings via recently issued bonds (3).

Pressure from institutional investors for greater climate action has increased in recent months (4) - with some, including the Dutch pension fund PFZW, going as far as to withdraw mandates from BlackRock and other asset managers because of their failure to take climate risks into account (5). But most have remained silent, despite their fiduciary obligations to their clients, which should require them to take climate impacts on the economy, and on their portfolios, into account.

Only a few of the 30 asset managers assessed appear to have taken credible steps to limit investment in fossil fuel expansion, such as Ostrum Asset Management found not to hold any recently issued bonds from fossil fuel developers, and BNP Paribas AM committing not to purchase any bonds issued by oil and gas producers on the primary market.

"Pension funds and other asset owners can no longer ignore the climate-related financial risks from working with asset managers that are investing in fossil fuel expansion. They have a fiduciary duty to act in the interests of their clients and beneficiaries, yet most seem willing to turn a blind eye. While some asset owners have already taken action, they must all demand more from their asset managers and insist on robust climate action. They must ensure that asset managers take their climate concerns into account and stop supporting on-going fossil fuel expansion. And if asset managers cannot meet their requirements, they must not entrust them with any new investments," said Agathe Masson, Reclaim Finance's sustainable investment campaigner.

Reclaim Finance also found no progress when it came to asset managers' shareholder voting behaviour at company AGMs in 2025. The 30 asset managers analyzed did not use their votes to oppose fossil fuel companies' expansion plans, with 81% of votes on average in support of company boards of directors, including votes to re-elect directors responsible for expansion strategies (6). Just one asset manager, Union Investment, stood out by voting to oppose fossil fuel expansion strategies at almost all the AGMs of fossil fuel companies (7).

Reclaim Finance and partners are urging pension funds and other asset owners - including ABP in the Netherlands, NEST in the UK, and PFA in Denmark - to make their choice of asset manager conditional on ending support for fossil fuel expansion. They must require asset managers to stop investing in bonds issued by fossil fuel developers and to vote against the management of companies pursuing fossil fuel expansion and set out clear consequences if asset managers cannot comply.

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Notes

1. An assessment of the climate practices of asset managers, Reclaim Finance, AnsvarligFremtid, Fossielvrij NL, Sierra Club, SOS UK, Urgewald, 9 December 2025. For full details of the data analyzed, contact [email protected]
2. 51% of the financing for companies developing new fossil fuel projects comes from bond issuances. Bonds issuances therefore enable fossil fuel companies to finance their new fossil fuel project, contributing to exacerbate climate change.
3. BlackRock was found to hold USD 2.6 billion in newly issued bonds of oil and gas developers, compared to USD 1.7 billion last year, and Amundi held USD 343 million in newly issued bonds of oil and gas fuel developers, compared to USD 138 million last year.
4. For instance, in February, a group of 26 asset owners, representing over $1.5 trillion in investments, issued a statement calling on their asset managers to develop a robust engagement strategy to address climate risks.
   Financial Times, February 13 2025, Long term investors split with asset managers over climate risk
   Another example is the COP 26 Asset Owner Declaration, in which a group of UK universities and foundations published in May 2023 a letter calling on asset managers to halt new primary market investments linked to fossil fuel expansion and to vote against the re-election of directors of fossil fuel developers.
5. Dutch pension fund, PFWZ withdrew its mandate from BlackRock in September 2025 citing sustainability concerns; The People's Pension and AdademikerPension withdrew their mandates from State Street in February and March due to the asset manager's inadequate sustainability approach, in June Sierra Club Foundation broke from BlackRock, and in November 2025 the NYC Comptroller advised pension boards to drop BlackRock, Fidelity Investments and PanAgora due to their inadequate decarbonization plans.
6. When looking at support of company boards of directors, the analysis considers both director re-elections and approval of the discharge of the board of directors.
7. Union Investment opposed 95% of the resolutions approving the actions of the boards of directors of fossil fuel developers.

About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit https://www.sierraclub.org.