Major financial institutions are pulling out of a $68 trillion climate-investment group designed to pressure companies into pursuing environmental goals.
J.P. Morgan Asset Management and State Street Global Advisors are withdrawing from Climate Action 100+, a $68 trillion environmental-investment initiative featuring 170 companies and over 700 investors, both firms told National Review.
J.P. Morgan confirmed its decision to NR and said it will factor climate change into its investments based on its internal guidance instead of the Climate 100+ policy.
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“The firm has built a team of 40 dedicated sustainable investing professionals, including investment stewardship specialists who also leverage one of the largest buy side research teams in the industry – with over 300 analysts globally,” the spokesperson continued.
“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.”
State Street Global Advisors told NR the approach taken by Climate 100+ is not consistent with its approach to proxy voting and portfolio companies.
“After careful review, State Street Global Advisors has concluded the enhanced Climate Action 100+ Phase 2 requirements for signatories will not be consistent with our independent approach to proxy voting and portfolio company engagement. As a result, we have decided to withdraw from Climate Action 100+,” the firm said in a statement.
The companies committed to Climate 100+ have a market capitalization of $10.3 trillion and come from sectors such as mining, steel, utilities, shipping, and other major industries. Climate 100+ encourages firms to create a climate governance framework, reduce greenhouse gas emissions across value chains, and disclose its plans to hit climate targets. Cutting greenhouse gas emissions in half and reaching “net zero” emissions by 2050 are the targets Climate 100+ pushes companies to pursue.
Consumers’ Research Executive Director Will Hild, an advocate against Environmental, Social and Governance (ESG) investing and “woke” corporations, applauded J.P. Morgan and State Street’s decision.
“JP Morgan and State Street’s departure is a necessary step in the right direction, but consumers should wait to trust these companies again. By leaving the Climate Action 100+ climate cartel, they are signaling that the actions of millions of consumers and dozens of elected officials are having an effect,” Hild told National Review.
“These asset management firms are clearly afraid of the bad press and legal actions taken against their destructive net zero push. By agreeing to use their loan portfolio as a weapon against the American consumer and our economy they rightly drew the ire of everyone outside of the Wall Street and Davos elite,” Hild added.
House Judiciary Committee Chairman Jim Jordan subpoenaed Climate Action 100+ in June as part of his investigation into ESG investing and whether it violates antitrust law.
BlackRock is similarly pulling out as a corporate member of Climate Action 100+ and shifting its participation to a smaller subsidiary, according to the Financial Times.
Jordan subpoenaed BlackRock and State Street in December for information about how each firm pushes ESG policies and pushes other companies’ firms to reduce emissions.
“Today’s decisions by JP Morgan 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,” Jordan said in a statement.
Republican attorneys general who have been scrutinizing ESG, such as Iowa AG Brenna Bird and Montana AG Austin Knudsen, also had positive reactions to the decisions by BlackRock, State Street and J.P. Morgan.
“This is great news. Now, JPMorgan can focus on making a profit for their shareholders, which is their job, rather than concerning themselves pushing the woke, liberal agenda,” Knudsen said. “We need every asset management firm to follow suit.”
Climate 100+ is one of several major global programs for corporations and asset managers to work together on using investments to promote climate policy. The Glasgow Financial Alliance for Net Zero (GFANZ) is a similar umbrella organization of financial institutions committed to achieving a “net-zero” global economy. JP Morgan and State Street continue to be members of GFANZ.
On the state level, financial officers have steered funding away from ESG investments to push financial institutions to focus solely on achieving maximum returns. The State Financial Officers Foundation (SFOF), a free-market group, is among the organizations working with states to prioritize returns over policy goals.
“State financial officers have worked hard over the past few years to persuade banks and investment managers to return their focus to financial return and traditional conceptions of fiduciary duty so the decisions by JP Morgan Asset Management and State Street not to renew their membership in the Climate Action 100+ coalition is welcome news,” SFOF CEO Derek Kreifels told National Review.
“These firms have taken an important step in leaving Climate Action 100+, but still have a lot of work to do to regain people’s trust as a fiduciary focused on financial return. Their continued membership in other groups, like the Net Zero Banking Alliance and Net Zero Asset Manager’s Initiative, calls into question whether today’s announcement reflects a real shift.”
BlackRock did not respond to a request for comment.