The political ecology of asset manager capitalism and the harmful fiction of universal ownership

Abstract

There is a surge of interest in the theory and promise of universal ownership – namely, the proposition that ‘universal owners’ like the Big Three (the three largest asset managers) will internalize and mitigate environmental harms due to their supposed exposure to the entire universe of listed companies. The theory has elated the communication departments of institutional investors and their asset managers as well as much of academia. Drawing on political economy scholarship on asset manager capitalism, political ecology, and civil society research, we suggest that the theory of universal ownership is a harmful fiction – so-called universal owners are far from universal as they hardly invest in agricultural producers in the Global South, who will bear the brunt of the impacts of ecological degradation. We screen the equity portfolios of the Big Three and a lesser-known asset manager, Dimensional Fund Advisors, against a new database of companies involved in palm oil-related deforestation in Southeast Asia. We find that Dimensional holds a greater number of palm oil producers based in the region while the Big Three are primarily invested in the larger consumer goods companies based in the Global North that fuel demand for palm oil yet offload the ecological destruction associated with its production to distant suppliers in the Global South. The contrasting geographies of their portfolios not only challenge notions of universality but also point to a hitherto unexamined ‘politico-ecological private authority’ of index providers. We conclude by suggesting that collaborating with civil society organizations to ‘follow the money’ from the ground up is indispensable to the ability of scholars to put forth novel accounts of asset manager capitalism as a means of organizing space and nature.