In the first half of 2025, key European industries face an inflection point, with the new political forces in the European Union attempting to shape the path ahead. The future of transport policy—laid out in the Green Industrial Deal and the Action Plan released following the Strategic Dialogue on the Future of the Automotive Industry—is at a crossroads. Policymakers must decide whether to embrace the opportunities of decarbonisation or double down on the energy sources of the past. As policy negotiations advance, investors and real economy companies will have the opportunity to influence key steps towards meeting Europe’s climate goals.
As long-term institutional investors, asset owners hold an influential position in the financial system. Pension funds, insurance companies, and sovereign wealth funds can impact the behaviour of their asset managers, the companies in which they invest, and policymakers and regulators across a wide range of sectors. Over the past few years, various net-zero initiatives and commitments have emerged from within the sector, recognising the importance of addressing climate change. Chief among these is the UN-convened Net Zero Asset Owner Alliance (NZAOA), a group of global asset owners “committed to decarbonising their investment portfolios and achieving net-zero emissions by 2050”, that have pledged to “advocate for, and engage on corporate and industry action, as well as public policies, for a low-carbon transition.” [1]
The majority of large global asset owners, however, have not yet recognised this responsibility, as new research [2] published at the end of last year by the climate think tank InfluenceMap describes. This work assessed 30 of the world’s largest asset owners, representing at least €16 trillion in assets, and found that no asset owner is fully utilising its potential for influencing government climate policy. This reveals a significant opportunity for leadership among asset owners that are serious about their climate commitments.
Ambitious climate policy is a key driver for road transport electrification and decarbonisation. UK-based Phoenix Group has asserted that “without greater policy support we risk losing international competitiveness in growing markets such as clean energy and electric vehicles,” [3] and the investment arm of Norway’s Government Pension Fund has stated that “an orderly transition requires the continued support of effective climate policies at both the global and market level to efficiently price and restrict greenhouse gas emissions; it will not be achieved by companies and investors alone.” [4] However, companies themselves also have considerable potential to shape policy at an earlier stage.
There are examples, some highlighted in InfluenceMap’s report, of asset owners advocating directly on real economy transport policy. In 2023, the New York City Retirement Systems (NYCRS) supported policy in the US at the city, state, and federal levels by testifying in support of legislation to electrify New York City’s municipal fleet, advocating for federal funds to be used to decarbonise transport state-wide, and supporting the Environmental Protection Agency’s (EPA’s) highest proposed federal greenhouse gas (GHG) emissions standards. German asset owner Allianz, meanwhile, supported the UK’s Zero Emissions Vehicles (ZEV) Mandate and CO2 emissions regulation for new cars and vans, while the California Public Employees’ Retirement Systems (CalPERS) advocated for the transition to EVs and ZEVs and engaged directly with car manufacturers on this topic.
Some asset owners also demonstrate best practice on policy engagement-related stewardship—committing to vote in favour of shareholder resolutions that demand more lobbying transparency, setting expectations around positive climate engagement for investee companies, and establishing escalation policies for companies that are falling behind.
The more ambitious asset owners highlighted in the report took advantage of their positions as shareholders of industry leaders, engaging with car manufacturers and other companies on their climate lobbying activities. For example, in 2023, NYCRS conducted collaborative engagements with several large automakers including Ford, General Motors, PACCAR, and Toyota to encourage the companies to align their public policy advocacy with their net-zero commitments.
However, leadership on direct policy engagement and stewardship of climate lobbying is seen only from a small minority of asset-owners. Three-quarters of the asset owners analysed demonstrate what the research describes as an “overall lack of stewardship on climate policy engagement.” Only six of the 30 have started to integrate climate-related policy engagement systematically into their stewardship policies, and less than half publicly provide meaningful details on their stewardship practices. Additionally, almost none of the asset owners demonstrated a strategic level of direct policy advocacy.
Without directly engaging with governments on policy, asset managers are relying on a broad range of industry associations to represent them in policy debates. However, InfluenceMap’s research indicates that many financial sector industry associations take far more conservative positions than individual asset owners. For example, Insurance Europe is assessed by InfluenceMap as being oppositional to ambitious climate policy for the financial sector but counts among its members Dutch insurer Aegon—one of the highest-ranking insurers in the analysis for its direct advocacy. This trend is often called the ‘lowest common denominator effect’, when industry groups align with their most negative members on climate policy. InfluenceMap’s report found that seven of the 30 asset owners analysed maintained relationships with obstructive industry associations, whose climate policy advocacy is misaligned with science-based pathways to limit warming to 1.5°C.
Asset owners can play an important role in combating this trend by engaging on policy directly, carrying out industry association reviews to ensure their associations’ policy positions are aligned with their own commitments, and engaging with asset managers and investee companies to encourage them to do the same.
The number of asset owners making positive strides in this field are few, but their positive actions should serve as a roadmap for other investors to replicate. The transition to a low-carbon transport system will require significant investment. While large asset owners have considerable potential to help shape how policy enables this investment, this report shows that they are not using it. For their climate commitments to be credible, asset owners must take action.
The Authors.
By Cleo Rank, Program Manager for Climate Finance at InfluenceMap
