A group of Wall Street giants has decided to sit out one of the industry's biggest coalitions: the Glasgow Financial Alliance for Net-Zero.
GFANZ, whose members oversee $130 trillion, is finding it can't attract some of the top names in money management. Among them, PIMCO, Fidelity Investments, Capital Group, T. Rowe Price Group, PGIM, Northern Trust Asset Management and the fund management units of Goldman Sachs Group and Morgan Stanley.
In total, the eight holdout firms Bloomberg News contacted represent over $17 trillion in assets, which is more than the combined gross domestic product of the European Union. Asked why they opted out, they pointed to their fiduciary duty and to a reluctance to be bound by external rules.
Mark Carney, the co-chair of GFANZ, has spent much of 2021 trying to appeal to the financial behemoths steering capital flows to commit to decarbonization. He's sought to cater his arguments to a community that's laser-focused on making money. In a recent interview, Mr. Carney assured skeptics that a commitment to net-zero carbon emissions needn't hurt their bottom lines.
"Certainly not on a risk-adjusted basis," he said.
But his efforts have fallen flat in some key circles. And even though Mr. Carney occupies a seat on PIMCO's advisory board, the $2.2 trillion asset manager insists that joining would be a dereliction of its fiduciary duty.
PIMCO's owner, Allianz SE, is a member of three GFANZ suballiances.
Ryan Korinke, managing director and global head of sustainability at PIMCO, said the firm "strongly supports climate and sustainability-related initiatives." It also offers a "full range of strategies and products" that allow it to manage client money in a manner that's consistent with net-zero goals, he said, describing PIMCO as "a leader" in incorporating environmental, social and governance considerations into its investment process.
"However, as a fiduciary, we don't believe it's appropriate to make specific commitments on our clients' behalf, especially given the complexity of the long-term challenges ahead," Mr. Korinke said. For that reason, PIMCO hasn't joined GFANZ, he said.