Relationships between asset managers and owners undergo adjustments following New Zealand Asset Management's departure
BlackRock and Other Asset Managers Exit Net Zero Asset Managers Initiative Amid Political Pressure
In a significant move, asset managers BlackRock, Vanguard, Northern Trust, and others have left the Net Zero Asset Managers (NZAM) initiative, leading to the suspension of the network's activities. The departures are largely attributed to rising political and legal pressures, particularly in the US, where states have challenged ESG-related climate commitments as conflicting with fiduciary duties and economic priorities.
The exit of BlackRock, one of the world's largest asset managers, has been met with mixed reactions. Fredric Nystrom, head of sustainability and governance at Swedish pension fund AP3, stated that BlackRock's decision will be one of many factors considered in future relationship reviews. On the other hand, Diandra Soobiah, director of Responsible Investment for the £48bn master trust Nest, emphasized the importance of managing climate change risk and its impacts on investments.
BlackRock's exit coincides with a lawsuit by 10 Republican states over alleged breaches of anti-trust regulations. The firm claims that leaving NZAM and certain climate groups does not change how it manages portfolios, continuing climate-related activities through international affiliates and other alliances. Samantha Chew, stewardship lead at Aegon, argues that BlackRock has made significant progress on climate, despite having left the alliance.
The response from asset owners has been muted, with few making public statements about the matter. However, some asset owners, like Sweden’s AP7, are re-evaluating their manager relationships in light of the NZAM exits. There is growing concern that membership of the alliance had not always translated into action on climate. Aegon hopes that the strategic review and period of reflection will move the coalition to a stronger focus on effective activities.
The departures have implications for asset owners, including increased uncertainty and scrutiny over ESG commitments and how these impact long-term climate goals embedded in fiduciary mandates. Asset owners may need to reassess their relationships with managers like BlackRock and potentially realign mandates due to shifts in climate strategies amid regulatory and political landscapes.
Despite the political headwinds and some withdrawals, many asset managers still maintain ESG policies and sustainability teams. However, US political pressures have led to a decrease in NZAM signatories from 63% in 2024 to 57% in 2025. Aegon believes that alliances can be useful, but they need to focus on undertaking the right activities in the most effective way.
In summary, BlackRock's exit from NZAM reflects a broader tension between climate commitments and political/legal constraints in key markets, prompting asset owners to carefully assess implications for portfolio management and fiduciary responsibilities. The firm’s move signals a pragmatic response to regulatory pressures rather than a full disengagement from climate investing, but contributes to uncertainty around net-zero collective initiatives.
[1] The Guardian
[2] Reuters
[3] Pensions & Investments
[4] BBC News
- Amidst the political pressure and suspension of the Net Zero Asset Managers (NZAM) initiative, asset owners may need to reassess their relationships with managers like BlackRock and potentially realign mandates due to shifts in climate strategies, as environmental-science and climate-change risk management become increasingly important in business and finance.
- Despite the exit of BlackRock from the NZAM, it is crucial for asset managers to continue their ESG policies and focus on climate-change investing, as Financial and Business sectors are expected to play a significant role in meeting environmental targets and future-proofing their portfolios against climate-change risks.
