JPMorgan Asset Management (JPMAM) and State Street Global Advisors (SSGA) have confirmed their departure from Climate Action 100+ (CA100+), an investor coalition pushing companies to take action on climate change, as reported by Reuters on February 15. BlackRock [BLK:US], a signatory to Climate Action 100+, has also transferred its membership to its smaller international arm to limit its involvement. The decisions of the world’s largest asset managers were made after CA100+ recently asked signatories to step up pressure on polluting companies to decarbonize. The retreat of the three investment companies means nearly USD14tr of total assets are leaving the initiative.

Last June, CA100+ announced a shift from its “phase 1” requirements focused on improving governance, reducing emissions, and enhancing climate-related financial disclosures to the second phase, in which signatories shall push portfolio companies to cut emissions actively. However, BlackRock noted that the “phase 2” strategy conflicts with US laws requiring money managers to act solely in the long-term economic interests of their clients. Furthermore, SSGA also underscored the inconsistency between the “phase 2” strategy and the firm’s independent approach to proxy voting and engagement with portfolio companies. Meanwhile, State Street [STT:US] and BlackRock, among other companies joining collective climate action groups, are bearing increased political pressure from US Republican politicians. Last December, the US House Judiciary launched antitrust investigations over BlackRock and State Street’s ESG practices. Republicans on the Judiciary Committee raise concerns that ESG investing, with its focus on environmental targets, could divert asset managers from investing in the best interests of their clients.

Sources:

https://www.reuters.com/sustainability/sustainable-finance-reporting/jpmorgan-fund-arm-quits-climate-action-100-investor-group-2024-02-15/

https://www.climateaction100.org/news/climate-action-100-announces-its-second-phase/

https://www.bloomberg.com/news/articles/2024-02-15/jpmorgan-state-street-decide-to-leave-industry-s-biggest-climate-group

https://www.ft.com/content/3ce06a6f-f0e3-4f70-a078-82a6c265ddc2