The lawmakers sent the companies in question a letter and an interim report with evidence that financial institutions and climate activists are colluding to “adopt left-wing environmental, social, and governance (ESG)-related goals, potentially in violation of U.S. antitrust law.”
The companies are being asked to explain their ESG goals and disclose the requests they will be making of the businesses in their portfolio. They are also being instructed to save "all documents and communications referring or relating to the company's efforts to advance ESG-related goals."
A representative for Climate Action 100+ co-founder Ceres, a climate-focused group of investors, said that they had already provided the committee with tens of thousands of documents and that the letters were not likely to yield anything new. They accused the letters of being part of an effort to deter other investors from taking part in the initiative.
The Chairman of the Subcommittee on the Administrative State, Regulatory Reform and Antitrust, Thomas Massie (R-Kentucky), and the Chairman of the Judiciary Committee, Jim Jordan (R-Ohio), described the group as a “woke cartel” and said they are examining "whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion to promote ESG-related goals in the investment industry.”
They also said that the members of the Climate Action 100+ will have to answer for “prioritizing woke investments over their own fiduciary duties.”
Companies are leaving Climate Action 100+ initiative in droves
Climate Action 100+ has been hit by a number of high-profile departures recently, including Invesco, State Street Global Advisors, Pimco and JPMorgan Asset Management. BlackRock has also withdrawn its U.S. business, and Swiss Re pulled out of its role as a “supporter” of the group.
State Street Global Advisors and BlackRock identified the group’s entry into “phase 2” as the reason for their exit as the initiative shifted the focus from requiring participants to disclose their emissions to putting climate transition plans into place. BlackRock said that doing so could represent a violation of U.S. requirements to act only in the long-term financial interests of their clients, while State Street Global Advisors said that the new phase’s requirements went against their independent attitude toward portfolio company engagement.
At the time, Jordan applauded the move on X, writing: “Today’s decisions by JPMorgan and State Street are big wins for freedom and the American economy, and we hope more financial institutions follow suit in abandoning collusive ESG actions.”
However, New York City Comptroller Brad Lander accused the companies that defected of ignoring the climate and “caving to climate deniers.”
In addition, the $516.5bn asset manager Parametric and sustainability company Calvert Research dropped out of the initiative, noting in a joint statement that they were committed to fulfilling their fiduciary obligations to their clients.
Climate Action 100+, who claims to have more than 700 investors and 170 companies on board at the moment, says on its website that it is aimed at ensuring “the world’s largest corporate greenhouse gas emitters take appropriate action on climate change in order to mitigate financial risk and to maximize the long-term value of assets.”
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