‘Companies should be concerned with their fiduciary duties, not joining ESG cartels,’ Utah Attorney General Sean Reyes said.
The environmental, social, and corporate governance (ESG) movement has just suffered a major setback, with the withdrawal on Feb. 15 of three of Wall Street’s largest firms from one of the most prominent climate activism clubs.
BlackRock, the world’s largest asset manager, JPMorgan Chase, America’s largest bank, and State Street, the world’s third-largest asset manager, announced their withdrawal from Climate Action 100+, an investment club that pledges “to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.”
Advocates for worldwide action against global warming have hailed Climate Action 100+ as a key player in efforts to align the world’s most powerful financial institutions behind net-zero goals espoused by global organizations like the United Nations and the World Economic Forum. At its peak, the climate club boasted 700 investor members that held $68 trillion in assets; however, with this week’s departures, Climate Action 100+ reduced its membership assets by approximately $16 trillion.
Founded in 2017, Climate Action 100+ compelled its members to target 170 “focus companies” in CO2-emitting industries such as oil production and airlines, threatening shareholder votes against companies that refused to commit to net-zero goals. The organization touted its success in getting 75 percent of targeted companies to go along with its agenda.
In June 2023, however, the organization went further, demanding that members publish their shareholder voting records to prove that they were in fact actively pushing climate goals and not just paying lip service to them. This went too far for some members, who were facing warnings and investigations from GOP state attorneys general and members of Congress that they may be engaging in illegal collusion.
This week, State Street Global Advisors issued a statement that it “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.”
Proponents of the climate agenda were highly critical of the firms’ exit from the climate club.
New York City Comptroller Brad Lander said the three companies were “caving to climate deniers,” and threatened to “consider our options for the management of our public market investments,” possibly shifting pension money to more dedicated climate-activist fund managers.
Critics of the climate club, however, applauded the exit.
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