Republicans on the House Judiciary Committee accused some of the biggest Wall Street firms Tuesday of colluding with advocacy groups to force participation in environmental, social, and governance investing, raising anticipation for a hearing featuring activist investors this week.
An interim report published Tuesday by House Judiciary Committee staff details what it describes as “new, direct evidence” of a “climate cartel” consisting of left-wing activist groups and major financial institutions working together to force companies to decarbonize.
The report accuses the “cartel” of colluding with companies by leveraging negotiations with management, filing shareholder resolutions, or voting out or threatening to replace board members in order to ramp up or escalate pressure against leaders who failed to take action on ESG investing.
The House report also focused heavily on the actions of groups such as Climate Action 100+, a more than 700-member investor group focused on emissions reduction efforts. Climate Action 100+, it said, “bullies” asset managers to join and then pressures them to align their efforts and shareholder votes with the group’s broader decarbonization goals.
The report comes nearly two years after the Republican-led House Judiciary Committee launched its investigation into whether certain corporate ESG investing practices violate federal antitrust laws.
Since then, the committee has requested ESG-related documents from more than two dozen organizations, including BlackRock and State Street.
In a press release announcing the report Tuesday, the committee credited that investigation to have prompted several major asset managers, such as State Street and Vanguard, to exit Climate Action 100+.
The report also accused the Biden administration of failing to “meaningfully investigate the climate cartel’s collusion, let alone bring enforcement actions against its apparent violations of longstanding U.S. antitrust law.”
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The White House did not respond to the Washington Examiner’s request for comment.
It also comes just one day before executives from CalPERS and Arjuna Capital are slated to appear before the House Judiciary Committee for a hearing on ESG investment practices, in which they will likely come under heated questioning by Republicans.