Welcome back to today’s edition of The Strawman. The newsletter that holds fund managers accountable—without the 12-page quarterly report. Let’s get into it.

The Warning Shot

A coalition of 26 institutional investors managing $1.5tn is demanding that asset managers step up their climate action, or they’ll take their business elsewhere. Among the group are Scottish Widows, People’s Partnership, and Brunel Pension Partnership, each responsible for millions of retirement accounts.

Their concern? Climate change is a long-term financial risk—particularly for pension funds, which need to guarantee retirement pay-outs for decades.

The short-term focus of asset managers has clashed with the pension funds’ long-term objectives. As Leanne Clements, head of responsible investment at People’s Partnership, puts it: described the the “financial arguments for climate change” being above “short-term political challenges.”

In other words, climate risk isn’t just a sustainability issue; it’s a retirement security issue.

Climate Backlash Meets Investor Pushback

The split comes at a turbulent time. After Donald Trump’s election and growing opposition to environmental, social, and governance (ESG) investing from US Republican governors, several major asset managers have scaled back their public support for climate initiatives.

For example:

• BlackRock recently left the Net Zero Asset Managers and Climate Action 100+ coalitions after being accused of anti-competitive behaviour.

• BP and Shell have rolled back climate commitments.

But pension funds are doubling down. They’ve made it clear that climate stewardship is non-negotiable. Faith Ward from Brunel Pension Partnership warned that asset managers are the ones who manage the money, if they don’t align with their goals — they’ll find someone who does.

Step Up or Be Dropped

The group outlined clear demands for their asset managers, with the threat of being dropped from future mandates:

1. Robust Climate Strategy: Asset managers must actively engage with companies on climate risks and show measurable progress.

2. Adequate Resourcing: Stewardship teams can’t be an afterthought. The funds expect proper staffing to oversee the companies they invest in.

3. Voting Transparency: Asset managers must vote consistently in favour of climate initiatives at shareholder meetings. No more mixed messages.

The consequences for failure? “Poor stewardship” could lead to downgrades, mandate reviews, or complete removal.

The Make My Money Matter campaign, co-founded by filmmaker Richard Curtis, recently criticised UK pension funds for not doing enough to prevent their investments from worsening the climate crisis.

The Strawman’s Takeaway

Climate-conscious investing is here to stay. Pension funds aren’t just holding their asset managers accountable—they’re shaping the future of finance. If managers won’t adapt, they’ll be shown the door.