Investment giant PGGM withdraws sustainability commitments with L&G and BlackRock, pursuing independent path.

In the ever-evolving landscape of sustainable investing, two major players, Legal & General (L&G) and BlackRock, have found themselves at the centre of recent changes.

According to ShareAction's Voting Matters Report, L&G has consistently performed well, securing the 21st spot in the 2024 edition and the 17th position in the 2023 report. The fund's popularity is evident in its association with prominent pension funds such as the HSBC Pension Scheme and the TfL Pension Fund, through its Future World Fund.

However, the latest 2025 Point of No Return Report by ShareAction places L&G in a more favourable position, with the fund taking the 10th spot as one of the better performing managers.

On the other hand, BlackRock, a global leader in asset management, has seen a significant shift. Dutch pension fund manager PGGM, citing growing concerns over stewardship alignment, terminated its €14.5bn mandate with BlackRock. This decision was part of a wider investment overhaul, with PGGM investing its listed equities with Robeco, Man Numeric, Acadian, Lazard, Schroders, M&G, UBS, and internally through PGGM.

The move by PGGM is part of a growing trend of climate-conscious asset owners stepping away from larger US managers. The Dutch pension fund PFZW, for example, considered PGGM, its main asset management company, as a potential alternative provider for managing its equity investments after exiting Legal & General and BlackRock due to sustainability concerns.

The People's Pension, another significant player, moved £28bn out of State Street, citing concerns over the manager's stance on climate. Interestingly, despite terminating its listed equity mandate with BlackRock, The People's Pension moved its money market funds assets with the same manager.

Campaigners have targeted Aviva and LGIM over Shell and BP AGM votes, highlighting the increased scrutiny on companies' environmental practices.

JP Morgan Asset Management estimates that between €11trn and €17trn in assets is currently held by institutional asset owners with commitments to net-zero targets. The firm also sees a $11.7trn climate opportunity for European asset managers.

Managers with greater credibility on climate could capitalize on this growing demand, according to JP Morgan Asset Management. L&G, with its relatively high rankings in ShareAction's reports, may find itself well-positioned to meet this demand.

However, the landscape of sustainable investing is dynamic, and changes are constant. As more asset owners focus on climate and sustainability, it will be interesting to see how L&G and BlackRock adapt and respond to these shifts.