House Judiciary Committee probes investment firms over ESG ties

The Republican-led House Judiciary Committee took aim at a group of US asset managers over their involvement with a “woke ESG cartel” — adding pressure against environmental efforts by large investors.

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The committee, chaired by Ohio Rep. Jim Jordan, sent letters to 60 firms — including BlackRock, State Street and JPMorgan Asset Management  — that are members of the Net Zero Asset Managers initiative, or NZAM, an international group of investors that signed on to a pledge to achieve net zero emissions by 2050.

The letters, sent Friday, made claims in line with a committee report released on Dec. 13 that Republicans say showed fund firms colluded to cut emissions.

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That report found that top asset managers in the US were concerned that signing up for an industry climate initiative would make them look like they worked too closely together and attract regulatory scrutiny.

The committee’s Democrats have dismissed such claims, and big fund firms have denied similar charges.

Jordan alleges in the letter that that companies’ efforts with NZAM and the affiliated Glasgow Financial Alliance for Net Zero “may violate U.S. antitrust law,” citing the earlier report.

It asks for information such as how companies’ participation in NZAM changed their stewardship strategies.

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GOP Judiciary Committee members claim that investor preoccupation with environmental, social and governance (ESG) strategies takes the focus away from delivering profits for shareholders and imposes unnecessary restrictions on business.

Republicans previously have taken credit for prompting three fund managers — BlackRock, State Street and JPMorgan Asset Management — to step back from another investor group, the Climate Action 100+.

Mindy Lubber, CEO of Boston-based environmental advocacy group Ceres, an organizing partner of NZAM, said in an interview that the letters were “consistent with other efforts to suggest that investors ought not to consider climate risk, when of course they should be aware of climate risk as part of their fiduciary duty.”

NZAM says that its initiative has attracted some 325 signatories managing $57.5 trillion globally, according to its website.

With Post Wires