Leading Asset Management Firms Withdraw from the UN Climate Action 100+

The departure of major asset management firms—JP Morgan Asset Management, State Street Global Advisors, PIMCO, and BlackRock (“BlackRock, Inc.”)—from the United Nations climate alliance, Climate Action 100+, signifies a shift in the sustainable investing landscape. According to a report by Morningstar, U.S. sustainable funds witnessed their first year of net outflows in over a decade during 2023, with a withdrawal of $5 billion in the fourth quarter alone and a total of $13 billion throughout the year. This downturn, potentially influenced by underperformance and ongoing political scrutiny in the United States, has earmarked 2023 as the most challenging calendar year for U.S. sustainable funds.

These developments could impact the Architecture, Engineering, and Construction (AEC) industry. The changing dynamics could impact the funding availability for projects with notable environmental footprints. This scenario may necessitate adjustments in the sustainability criteria that inform investment decisions, potentially making it more difficult for projects failing to meet new benchmarks to obtain financing.