UK funds tell Texas: Emission reduction vows matter to our reputation

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May 12 (Reuters) – Two major British asset managers have defended their efforts to cut emissions to Texas officials and said their companies could face reputational risks if they fail to meet their commitments to cut emissions. carbon emissions.

The letters from Man Group PLC (EMG.L) and abrdn plc, (ABDN.L) reviewed by Reuters following a public records request, are in response to a new Texas state law that states that companies boycott the fossil fuel industry could be banned from handling pension fund money in the state.

Many financial executives have pledged to lobby for portfolio companies to reduce their greenhouse gas emissions. But it has drawn the ire of US Republicans, who say they are imposing environmental restrictions on borrowers outside normal political channels. Few major asset managers have followed some universities in getting out of fossil fuels altogether. Read more

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At stake with the new Texas law are assets including $1.4 billion that Man Group of London manages for the Teacher Retirement System of Texas, and $59.7 million that the system owns with abrdn of Edinburgh , formerly Standard Life Aberdeen. Read more

Whether the money can be kept depends in part on Texas Comptroller Glenn Hegar, who in March began sending requests for information to some 158 companies, with responses expected starting this month. Read more

The letters from Man and abrdn mark the first detailed responses from major corporations to Hegar’s request that have been made public.

Man and abrdn wrote that they have no company-wide restrictions against investing in energy companies, and they do not boycott them.

Instead, when asked if they commit to environmental standards beyond federal or state laws, Man and abrdn described their membership in the Net Zero Asset Managers Initiative.

The signatories, including most of the world’s largest fund companies, commit to pressuring the companies in their portfolios to achieve net zero emissions by 2050 or earlier in order to limit global warming. Read more

Man and abrdn noted that this effort does not require them to divest from fossil fuels.

Instead, the companies said, they could see their reputations tarnished if they do not reduce their emissions as the voluntary industry group wants.

“We would be exposed to reputational risk if we failed to meet our commitments,” abrdn wrote in the letter dated April 28.

A representative for abrn said executives were unavailable for further comment.

A similar letter from Man Group sent on April 19 says it could be kicked out of the initiative if it fails to meet its targets.

“This may have reputational, corporate ratings and/or customer consequences for Man Group. There are, however, no direct legal or economic consequences of not meeting its commitments under the initiative. “, according to the letter.

The man declined to comment further.

A spokesperson for Hegar said he would not comment on the responses. The goal is to create a list of companies boycotting the fossil fuel industry by September 1, spokesman Kevin Lyons said. Companies on the list could then be banned from handling public pension fund money in Texas.

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Reporting by Ross Kerber in Boston, additional reporting by Simon Jessop in London, editing by Rosalba O’Brien

Our standards: The Thomson Reuters Trust Principles.

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