Deepening disagreement between US and European leaders on climate change policies intensifies
In a new report titled "Point of No Returns 2025," published today, the Dutch firm Robeco has once again topped the table for responsible investment, with European managers significantly outperforming their North American and Asian peers across all environmental themes.
The report measures the 76 largest asset managers against 20 standards of responsible investment. The findings reveal a stark contrast between European and US asset managers, with the latter lagging behind primarily due to policy and regulatory differences, investor confidence, and market incentives.
One of the key areas where European managers excel is in encouraging companies to disclose location-level biodiversity risks and impacts. Aviva Investors, Robeco, and Legal & General were singled out for their efforts in this regard. However, only one-third of firms take concrete action when companies fail to improve their practices, and more than half of asset managers, especially those from the US and Asia, fail to meet even a single standard in the area of biodiversity.
The report also highlights the lack of sector-specific policies for high-impact industries like mining, chemicals, and agriculture. Despite growing scientific consensus that biodiversity loss is both a driver and consequence of climate change, most managers lack such policies.
In contrast, European managers are more likely to impose fossil fuel investment restrictions, engage companies on biodiversity risks, and produce climate transition plans. For instance, SEB Asset Management, based in Sweden, has set timebound, absolute emissions reduction targets covering more than 50% of its assets.
The regulatory environment in Europe also plays a significant role. Europe has implemented binding ESG-related regulations and sustainability labeling that reduce greenwashing risks and provide transparency. This regulatory clarity has encouraged inflows into responsible funds, with more than $8.6 billion of net inflows in Q2 2025 into European sustainable funds, exceeding US inflows.
Meanwhile, in the US, recent policies have been less supportive or even opposed to climate and ESG initiatives, dampening enthusiasm among some US asset managers for ESG-focused investments. This, coupled with concerns about greenwashing due to a lack of similarly rigorous frameworks, has contributed to the slower adoption of responsible investment strategies by US asset managers.
The world's largest asset managers—BlackRock, Vanguard, State Street, and Fidelity—earned failing grades and collectively met just 4 out of 80 possible key standards across climate, biodiversity, and social issues. BlackRock, Vanguard, and others collectively held over $4.5bn in new fossil fuel bonds issued between 2023 and mid-2024, and their voting records suggest minimal support for environmental resolutions at shareholder meetings.
The overall pace of change in responsible investment is stagnating, with little progress made since 2023. In some cases, there are signs of regression, as fewer managers now escalate engagements or restrict investment in controversial industries compared to prior years.
The report concludes that for meaningful progress to be made, asset managers must take bold steps to address climate change, biodiversity loss, and social issues. This includes setting credible interim targets towards net-zero ambitions, engaging companies on biodiversity risks, and producing climate transition plans. Only then can the gap between European and US asset managers be bridged.
[1] Source: Sustainable Investment Forum North America 2025 [2] Source: Morningstar [3] Source: European Securities and Markets Authority (ESMA) [4] Source: Responsible Investment Association (RIA)
- European managers, exemplified by Aviva Investors, Robeco, and Legal & General, are leading the way in encouraging companies to disclose location-specific biodiversity risks and impacts, which is a key area where they surpass their US and Asian counterparts.
- Despite the growing scientific consensus that biodiversity loss is both a driver and consequence of climate change, most asset managers, especially those from the US and Asia, fail to meet even a single standard in the area of biodiversity, according to the report, highlighting a stark contrast between the environmental performance of European and US asset managers.
