JPMorgan (JPMAM), State Street (SSGA), and BlackRock dropped out of Climate Action 100+, the controversial ESG (Environmental Social Governance) group that pushes companies to address climate change.
Leslie has covered the ESG/bank situation many times, especially concerning BlackRock. That company is the last of the top five managers in the group.
The Financial Times said Climate Action “challenges” these “companies to reduce their carbon footprint.”
I call it bullying:
SSGA said Climate Action’s latest corporate engagement requirements had gone too far. These “phase 2” requirements, announced last year, shifted from pressuring companies on climate disclosures to pushing them to actively reduce greenhouse gas emissions.“SSGA has concluded the enhanced Climate Action 100+ phase 2 requirements for signatories are not consistent with our independent approach to proxy voting and portfolio company engagement,” SSGA said in a statement.JPMAM said it had made a “significant investment” in its own stewardship team and corporate engagement. “Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”
Republicans have been putting pressure on the companies and Climate Action 100+ to produce communications and documents to determine any violations of antitrust laws.
House Judiciary Committee Chairman Jim Jordan subpoenaed Ceres after the company only handed over 299 documents.
But it also goes to the state level:
Texas, the leading US oil-producing state, has declared Climate Action 100+ to be anti-oil and blocked financial companies, including BlackRock, from doing business with the government.Oklahoma, another oil producer, banned JPMorgan, BlackRock and others from doing business with the state in 2023.
Agricultural officials from 12 states launched probes into ESG investing practices at some big banks. The officials worry that the involvement could “impact food availability, lead to price increases, limit credit access for farmers, and have broad negative economic consequences.”
Tennessee Attorney General Jonathan Skrmetti sued BlackRock, alleging the firm harmed consumers through ESG.
“We allege that BlackRock’s inconsistent statements about its investment strategies deprived consumers of the ability to make an informed choice,” explained Skrmetti.
Leslie also blogged how Europe has cooled its attitude towards ESG strategies due to energy reality.
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