Asset managers feeling the heat on climate from pension funds

Pension funds, managing over USD 73 trillion globally, face systemic risks from climate change that could reduce returns by 33% by 2050. While 200 major funds have begun divesting from fossil fuels to fulfill fiduciary duties, third-party asset managers often maintain carbon-intensive investments. This misalignment has led pension funds to withdraw over USD 100 billion from managers including BlackRock and State Street.

• Climate change presents systemic financial risks to pension funds, including physical risks from extreme weather, transition risks such as stranded assets in coal power, and liability risks from litigation. A study by Ortec Finance indicates that in a high global warming scenario, pension funds could see a 33% loss in returns by 2050.
• There is a significant disconnect between the climate goals of pension funds and the actions of the asset managers (AMs) they employ. While 200 pension funds across Australia, North America, and Europe have started moving away from fossil fuels, a review of 30 top US and European AMs found they invested at least USD 16.9 billion in fossil fuel developer bonds between January 2024 and June 2025.

APA

Woodman, B. (2026). Asset managers feeling the heat on climate from pension funds. Zero Carbon Analytics. https://zerocarbon-analytics.org/finance/asset-managers-feeling-the-heat-on-climate-from-pension-funds/

Chicago

Woodman, Bridget. Asset managers feeling the heat on climate from pension funds. Zero Carbon Analytics, 2026. https://zerocarbon-analytics.org/finance/asset-managers-feeling-the-heat-on-climate-from-pension-funds/.

Wikipedia

{{cite report |last1=Woodman |first1=Bridget |title=Asset managers feeling the heat on climate from pension funds |publisher=Zero Carbon Analytics |date=7 January 2026 |url=https://zerocarbon-analytics.org/finance/asset-managers-feeling-the-heat-on-climate-from-pension-funds/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{woodman2026asset, author = {Woodman, Bridget}, title = {{Asset managers feeling the heat on climate from pension funds}}, institution = {Zero Carbon Analytics}, year = {2026}, month = jan, url = {https://zerocarbon-analytics.org/finance/asset-managers-feeling-the-heat-on-climate-from-pension-funds/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }