Last week, State Street Global Advisors announced that it is leaving the group Climate Action 100+, which seeks to use financial power to implement the goals of the radical progressive climate agenda. This follows on the heals of BlackRock’s backpedaling, and Vanguard’s leaving a similar group, the Net Zero Asset Managers initiative. Silla Brush reports for Bloomberg News:
State Street Corp. is pulling out of the world’s biggest investor group devoted to tackling climate change, saying the organization has hamstrung the firm’s own approach to the matter and its ability to interact with corporations.
The Boston-based firm’s asset-management arm, with $4.1 trillion of client wealth, concluded that the latest requirements from Climate Action 100+ “are not consistent with our independent approach to proxy voting and portfolio company engagement,’’ State Street Global Advisors said in a statement Thursday.
The broader finance industry is shifting course on its approach to climate change amid political backlash from Republicans who have opened investigations into firms’ climate and environmental, social, and governance policies.
The climate group, which was set up in 2017 to press corporations to cut greenhouse emissions, said last year it would ramp up efforts to get companies to turn their pledges on climate change into real-world action. The group comprises more than 700 investors with $68 trillion of assets.
State Street said in the statement that it’s withdrawing from the group in response to last year’s new goals, which are meant to run until 2030. The decision comes on the same day that JPMorgan Asset Management said it’s also leaving the coalition.
CA100+ has asked members to encourage companies they invest in to reduce emissions, enhance corporate disclosures, and implement transition plans to deliver on targets. Lead investors will be asked to submit annual schedules of engagement, specifying actions and strategies they plan to use, according to the group’s website.
The new goals came as Republican lawmakers ramped up pressure on financial firms over ESG.
State Street, BlackRock Inc., and Vanguard Group Inc. have been subpoenaed by a Republican-led panel in the US House of Representatives for documents related to their ESG policies. The House Judiciary Committee is investigating firms for potential collusion and violations of US antitrust law stemming from their work to combat climate change.
The increasing scrutiny has prompted some of the world’s biggest financial firms to withdraw from international groups and emphasize their independence and own decision-making processes. Vanguard pulled out of the Net Zero Asset Managers initiative, while Munich Re and Axa SA are among firms that walked out of the Net-Zero Insurance Alliance.
Action Line: The question is, how did so many smart people think this was a good idea in the first place, and then, what took them so long to leave? Asset managers should put shareholders first, not the demands of the radical progressive agenda. They abandoned their fiduciary duty. When you want to talk about an asset manager’s fiduciary duty to clients, I’m here. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
P.S. Read more here:
