For most South Africans, pensions are their largest asset, yet few know where their money is invested. Retirement savings could be funding controversial weapons manufacturers, coal plants polluting the planet, or tobacco companies – without clients’ knowledge.
When asset managers invest in these industries, they are not only funding harm but also exposing client portfolios to industries facing increasing risks. This is why responsible investment matters. It is grounded in the understanding that a stable climate, functioning ecosystems and healthy societies are prerequisites for a world worth retiring into. Responsible investment fosters transparency, empowering clients to verify that their investments align with their values.
South Africa’s asset management industry has long positioned itself as a leader in responsible investment among emerging markets. Just Share’s Asset Manager Responsible Investment Benchmark 2025, however, reveals a substantial gap between what managers claim to be achieving and what is happening in the real world.
The Responsible Investment Benchmark is the first comprehensive benchmark of the asset management sector’s performance against international best practice standards. We assessed the 20 largest South African asset managers against 20 key standards covering governance, climate change, biodiversity and social impacts. The methodology, developed by UK-based nonprofit ShareAction and applied by ShareAction to its review of 76 global asset managers, provides an independent yardstick for evaluating responsible investment performance. The results are sobering: 85% of South African managers received grades of E or F, with scores below 25%.
Even the top-performing local manager, Ninety One, only achieved 30% – a score that would rank it 24th globally in ShareAction’s assessment. The Public Investment Corporation, South Africa’s largest asset manager with R2.69-trillion under management, scored 8%. These aren’t isolated underperformances in niche areas; they reflect systematic weaknesses across all assessed themes.
The benchmark highlights a fundamental challenge: the absence of public disclosure that would allow clients and beneficiaries to assess whether asset managers’ claims about responsible investment align with their actual practices. None of the 20 assessed managers publicly discloses sustainability metrics across all portfolios. This opacity makes it effectively impossible for pension fund members, institutional clients or retail investors to evaluate whether their investments match their values or are exposed to material risks.
Climate change
On climate change, the gaps are particularly pronounced. Only 15% of South African managers have set net-zero targets, compared with 80% of the global managers assessed by ShareAction, and 65% impose no restrictions on fossil fuel investments. Most have not conducted climate scenario analysis or published transition plans showing how they intend to navigate the shift to a low-carbon economy. Despite half the surveyed managers emphasising the importance of a just transition, evidence of capital allocation decisions reflecting this priority remains minimal.
Given South Africa’s classification as a climate hotspot and the country’s urgent need for transition finance, these absences are concerning from both a risk management and a developmental perspective.
Biodiversity
Performance on biodiversity was weaker still, with 90% of managers failing to meet any of the benchmark’s biodiversity standards. Biodiversity loss and climate change are interconnected systemic risks. The World Economic Forum estimates that more than 50% of global GDP depends on well-functioning ecosystems. Asset managers who fail to assess these dependencies expose their clients to risks they may not have consented to bear.
The benchmark also found that while many asset managers reference human and labour rights frameworks in their policies, none has investment policies that commit to restrictions on companies that transgress these frameworks. Asset managers remain reluctant to impose restrictions on damaging industries such as controversial weapons and tobacco.
These findings raise a critical question: what does responsible investment mean in practice? Many asset managers argue that they prefer engagement with investee companies over investment exclusions or restrictions. Engagement in which shareholder influence encourages improved corporate behaviour on material issues is indeed a valuable tool. However, the benchmark reveals significant weaknesses in how South African managers approach engagement.
Measurable changes
The real test of responsible investment is whether actions lead to measurable changes in corporate behaviour. Without clear expectations, defined timeframes and escalation strategies when engagement fails, the process inevitably becomes performative rather than substantive. None of the assessed managers has an engagement policy with time-bound triggers and specified consequences for unsuccessful engagement. Engagement without accountability simply preserves the status quo. Companies face no consequences for failing to address material risks, while asset managers can continue claiming that they are actively managing these issues through dialogue. Meanwhile, client capital remains exposed to risks that engagement alone has proven insufficient to mitigate.
The “say on climate” vote at Sasol’s annual meeting on 14 November provided a practical illustration of these concerns. Sasol, South Africa’s largest industrial greenhouse gas emitter, and one of the most polluting entities on Earth, has been the subject of sustained engagement by asset managers on climate issues for many years. Since unveiling its original emissions reduction roadmap in 2021, the company has missed targets, reported inconsistently, and revised its approach.
Notably, Sasol has filed with the US Securities and Exchange Commission that it “can provide no assurances” that its emission reduction plans will succeed “in a commercially viable manner or at all”. The company has also refused to table shareholder proposed resolutions seeking greater climate transparency, claiming such matters fall within board management prerogatives – but has tabled its own non-binding climate resolution for shareholder approval this year, and in 2021, 2022 and 2023.
The voting results from the 2025 AGM reveal the hollowness of asset managers’ engagement claims. While the climate resolution passed with 85% approval, the outcome masks troubling indicators of disengagement and a lack of accountability. 15% of shareholders voted against the resolution, and another 15% abstained – meaning 30% of voting shareholders declined to endorse Sasol’s climate strategy. While this represents a notable expression of shareholder concern about the credibility of the company’s approach, it falls short of ensuring real climate accountability from the company.
More revealing still is the decline in shareholder participation. Voting on Sasol’s climate resolution has dropped year-on-year, with 2025 recording the lowest participation rate since these votes began. The number of shares voted declined by 22% compared with 2021 – a pattern of disengagement that suggests asset managers are simply checking out of the process rather than exercising their stewardship responsibilities.
This lacklustre voting record highlights the fundamental weakness of South African asset managers’ engagement strategies. After years of claiming to be actively engaging with Sasol on climate issues, a significant portion of asset managers appear to have either voted in favour of a demonstrably inadequate climate plan, abstained from taking a position, or failed to vote at all.
If South African asset managers are genuinely committed to responsible investment through active ownership, they should be able to articulate clear expectations for companies, demonstrate progress against those expectations, and show what actions follow when progress is insufficient. The Sasol case reveals that when confronted with a company that has consistently failed to meet its climate commitments, asset managers chose to maintain the status quo – voting for an inadequate plan, abstaining, or simply not participating.
This isn’t an isolated case. The benchmark findings suggest that across the sector, claims of ongoing engagement often serve as justification for maintaining investments without requiring substantive change from investee companies. If South African asset managers are genuinely committed to responsible investment through active ownership, they should be able to articulate clear expectations for companies, demonstrate progress against those expectations and show what actions follow when progress is insufficient.
South Africa faces substantial systemic risks from climate change, biodiversity loss and social instability. Asset managers control trillions of rands and have both the responsibility and the capacity to help navigate these challenges. The benchmark shows how far the sector must travel to meet the standards required to ensure portfolios can withstand the systemic risks that will shape the economy their clients will depend on in retirement. The question is whether the industry will use these findings to drive meaningful improvement or continue with approaches that prioritise maintaining relationships over managing risks and driving change. DM