Why State Street Lost US$35bn to Amundi & Invesco Over ESG
One of the UK’s largest pension funds, the People’s Pension, has pulled £28bn (US$35.2bn) from State Street over ESG goals.
It decided to instead move £20bn (US$25bn) to Amundi and £8bn (US$10bn) to Invesco, leaving just £5bn (US$6.2bn) with State Street which had previously managed all of its assets.
This follows a pull back from ESG across US financial institutions.
Dan Mikulskis, Chief Investment Officer at the People’s Partnership, said: “The appointments of Amundi and Invesco are the culmination of months of work for our team, signalling a major evolution for The People’s Pension as we continue to grow and enhance our investment strategy.
“As one of the fastest growing asset owners in the UK, we have a responsibility to deliver strong, sustainable returns for our members and a best-in-class investment strategy.
“Both managers bring exceptional expertise and share our commitment to responsible investment, which is central to our approach.”
How State Street approaches ESG
In the first half of 2025, State Street Global Advisors reported that it supported 6% of environmental and 7% of social shareholder proposals.
This is a 14% decrease from its 2023 environmental proposal support and nearly a 50% decrease in support for engagement on social issues.
State Street is not alone in this – BlackRock and Vanguard also supported fewer environmental and social proposals than in 2023.
“Over the past few years, shareholder proposals have also become increasingly complex,” the report said.
“While we assess alignment of climate targets with relevant jurisdictional commitments, specific temperature pathways, and/or sectoral decarbonisation approaches, State Street Global Advisors is not prescriptive on target setting or target alignment.”
Mark Condron, Chair of Trustees for the People’s Pension, said: “Our move to segregated mandates alongside partnering with world-class asset managers demonstrates our ongoing commitment to being a leading force for positive member outcomes in the pensions industry.
“These appointments highlight The People’s Pension’s broader mission to balance strong financial performance with responsible investment principles.
“By selecting Amundi and Invesco, we have chosen to prioritise sustainability, active stewardship and long-term value creation for our near seven million members.”
Why Amundi and Invesco?
Amundi, which has been given £20bn (US$25bn) in passive developed market equities to manage by the People’s Pension, is Europe’s largest asset manager, headquartered in Paris, France.
It describes itself as a “responsible asset manager”, with an A+ rating in all categories from the PRI (Principles for Responsible Investment) in 2020.
It has a dedicated ESG department that reports directly to the CEO with more than 40 people around the world.
In 2021, Amundi achieved its goal of integrating ESG criteria in 100% of its actively managed open-ended funds and its website says “we now benefit from an unprecedented level of ESG integration across all our investment platforms”.
The People’s Partnership says Amundi showed strength in all areas of its balanced scorecard which looked for excellence across six key factors:
- Portfolio construction
- People and teams
- Risk management and systems
- Firmwide considerations
- Responsible investment
- Partnership capabilities.
Valérie Baudson, Chief Executive Officer of Amundi, said: “We are proud that The People’s Pension has chosen to partner with us and we will work with them in the best interests of British pensioners.
“As retirement regimes in the UK and across the globe continue to evolve, this partnership highlights Amundi’s capabilities in the fast-growing DC market.”
Invesco, which has been handed responsibility for more than £8bn (US$10bn) in fixed income investments by the People’s Pension, is headquartered in Atlanta, Georgia, USA.
In 2023, it carried out more than 2,200 engagements with companies on ESG topics and it has been a signatory to the PRI since 2013.
The People’s Partnership says that Invesco’s approach will feature net zero alignment alongside ESG analysis and active engagement with issuers to promote sustainable business practices.
Tony Wong, Senior Managing Director & Co-Head of Investments at Invesco, said: “We are tremendously excited to be a long-term partner for The People’s Pension in generating the best possible outcomes for the Scheme’s members by deploying the asset allocation, research and portfolio management expertise of our nearly 200 professionals in our global fixed income team.
“This a testament to the strength of our global fixed income platform but also delivers the full scope of Invesco capabilities to this strategic partnership.”
Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE.
Discover all our upcoming events and secure your tickets today.
Sustainability Magazine is a BizClik brand
