In a significant blow to the environmental, social, and corporate governance (ESG) movement, BlackRock, JPMorgan Chase, and State Street have withdrawn from Climate Action 100+, a leading climate advocacy group.
By yourNEWS Media Staff
Three of Wall Street’s heavyweight firms, BlackRock, JPMorgan Chase, and State Street, have announced their departure from Climate Action 100+, a prominent climate advocacy group committed to ensuring significant greenhouse gas emitters take necessary action on climate change. This withdrawal, dated February 15, marks a considerable setback for the environmental, social, and corporate governance (ESG) movement.
Climate Action 100+, celebrated as a pivotal force in uniting global financial institutions behind net-zero goals advocated by entities like the United Nations and the World Economic Forum, has seen its influence wane with the exit of these firms, which together manage assets totaling about $16 trillion out of the club’s peak $68 trillion.
Since its inception in 2017, Climate Action 100+ targeted 170 major CO2-emitting companies, enforcing shareholder votes against those not committing to net-zero goals. The initiative boasted that 75 percent of these companies aligned with its agenda. However, a June 2023 mandate requiring members to disclose their voting records to verify active support for climate goals sparked controversy and led to the recent high-profile withdrawals.
State Street Global Advisors, in a statement, expressed that the enhanced requirements from Climate Action 100+ did not align with their independent approach to proxy voting and engagement with portfolio companies.
The departure of these firms has drawn criticism from climate advocates, with New York City Comptroller Brad Lander accusing them of “caving to climate deniers” and suggesting a reevaluation of investment management options for public funds towards more climate-committed firms.
Conversely, the move was welcomed by critics of the climate initiative. West Virginia Attorney General Patrick Morrisey lauded JPMorgan Chase’s decision to exit Climate Action 100+, emphasizing the importance of financial institutions focusing on economic rather than political agendas.
The dominance of large financial firms in corporate America has been under scrutiny, with a 2019 Harvard Business Review study highlighting the concentrated ownership by institutional investors, including BlackRock, Vanguard, and State Street, in a significant portion of S&P 500 companies.
This week’s withdrawal from Climate Action 100+ follows Vanguard’s December 2022 departure from the Net Zero Asset Managers initiative, signaling a potential shift in the financial industry’s engagement with climate advocacy groups.
The reaction from GOP state officials was largely positive, with several applauding the decision as a victory for economic prosperity over “woke ESG policies.” Iowa Attorney General Brenna Bird and Utah Attorney General Sean Reyes both emphasized the importance of prioritizing financial returns over political agendas.
As the ESG movement faces increasing scrutiny and challenges, the departure of these major firms from Climate Action 100+ raises questions about the future effectiveness and direction of climate activism within the financial sector. Critics and supporters alike will be watching closely to see if this marks a significant turning point in the approach to environmental and corporate governance issues.
