America’s largest investment banks are fleeing a left-wing climate coalition ahead of a pending antitrust lawsuit against the group, in the latest blow to corporate environmental activism policies.
JP Morgan Chase, BlackRock, and State Street Advisors have all dropped out of the Climate Action 100+ network, a United Nations-backed coalition of some of the world’s largest asset managers, Fox News reported last week.
The exodus came as a group of Republican attorneys general are wrapping up a years-long investigation and preparing to file a major antitrust lawsuit against the left-wing climate network and its investment bank members this spring, the Washington Free Beacon has learned.
The news is the latest signal that industry leaders could be moving away from coordinated corporate environmental, social, and governance (ESG) policies due to concerns about legal fallout. The departures at Climate Action 100+ come as other industry-specific climate coalitions have been rocked by legal threats. Last spring, the Net-Zero Insurance Alliance, a U.N.-backed network of major insurance companies, lost nearly half its members after Republican attorneys general sent a letter warning that the group could be in violation of U.S. antitrust laws.
Climate Action 100+ was launched in 2017 with the goal of coordinating its members’ investment decisions to comply with global "Net Zero" carbon emissions standards. Critics say such coordination between global investors unfairly targets certain industries, such as oil and gas, and could harm consumers by inflating energy prices.
For the past three years, at least 20 state attorneys general have been investigating whether asset managers such as BlackRock engaged in illegal market manipulation.
One of them is Montana attorney general Austin Knudsen. He said companies that engage in such coordination could be "violating their fiduciary obligation."
"The point of these investment groups is to make profit for their clients," he told the Free Beacon. "They're not supposed to be worrying about all these woke liberal issues that they're now foisting upon boardrooms."
Iowa attorney general Brenna Bird said she felt "very encouraged" after seeing major investors drop out of Climate Action 100+. She chalked up the departures to the "pressure that Republican AGs from around the country have been bringing."
"Radical politics shouldn't be guiding investment decisions," she told the Free Beacon. "When a pension makes investment decisions based on politics, rather than return on investment and stability, that hurts people with pensions."
Tennessee attorney general Jonathan Skrmetti, whose office is suing BlackRock in a first-of-its-kind consumer protection lawsuit related to ESG, said he was pleased to see companies reconsidering such policies.
"We've seen a significant trend recently in companies distancing themselves from the more aggressive commitments and ESG," Skrmetti told the Free Beacon. "I think you'll see asset managers and other financial institutions … using ESG as an option, rather than trying to retool their entire business model."
"The concern that we had, collectively, with the Climate Alliance, and with some other coalitions, is the concentration of market power in the same direction, in a way that hurts consumers," he added.
Update 1:27 p.m.: This post has been updated with comment from Climate Action 100+.