A $1.2 Trillion Fund Manager Will Yank Funding From Companies With Bad Climate Change Records

April 24, 2018, 1:50 PM UTC

The head of personal investing at a $1.2 trillion fund manager says she plans to rescind investments in companies that haven’t worked at reducing climate change—and she’s lobbying other fund managers to follow suit.

Helena Morrissey of the London-based Legal and General is making a big push for sustainable investing, saying at a conference Monday that individual investors are becoming increasingly wary of putting their money in the market as they fear companies will act in ways that run counter to the investor’s own moral beliefs.

To push the corporate world in the right direction, she says, the company will be “naming and shaming” those who have failed to act as it pulls its funding.

“There comes a time when talk is over, and it’s time to vote with our feet. Money talks as they say,” she said. “Legal and General runs almost a trillion pounds of money so we are doing a lot with that. But if we add all our trillions together, we can certainly drive change.”

Legal and General might be the first fund to pull investments due to a company’s environmental track record, but it’s hardly the first to focus on that aspect of corporate culture. There are several mutual funds in the “ESG” (environment, social, and governance) space. And investors are showing a keen interest in them.

From January to July of last year, investors sank $3.5 billion into U.S.-based retail ESG funds and ETFs. That topped inflows for all of 2015, which hit $2.6 billion.

Overall, there was roughly $9 trillion in ESG assets for U.S.-listed products as of last year. There was $23 trillion worth of such assets globally at the start of 2016, according to the biennial Global Sustainable Investment Review, a 25% increase from 2014.