The US House of Representatives Judiciary Committee has subpoenaed BlackRock [BLK:US] and State Street [STT:US], requesting documents and communications related to the panel’s probe into their potential antitrust violations in environmental, social, and governance (ESG) practices, as reported by Reuters on December 15. The Republican-led committee initially requested relevant documents back in July but deemed the companies’ responses inadequate. The latest subpoenas require the two firms to submit relevant documents to the committee by January 12. Moreover, people familiar with the matter disclosed that similar subpoenas for Glass Lewis and Institutional Shareholder Services will be finalized soon.

Facing mounting political pressure from US Republican politicians, BlackRock and State Street have become the latest targets in a widening probe into collective climate action groups. 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, potentially jeopardizing the US economy. They also alleged that certain firms are acting together to prioritize environmental and social goals over purely financial considerations, potentially limiting competition and consumer choice. This investigation into BlackRock and State Street follows similar actions taken against other asset managers in recent months, including Vanguard Group and Arjuna Capital in October, and As You Sow and Glasgow Financial Alliance for Net Zero (GFANZ) in November.

Sources:

https://www.reuters.com/sustainability/sustainable-finance-reporting/blackrock-state-street-get-subpoenaed-by-house-esg-probe-bloomberg-news-2023-12-15/

https://www.bloomberg.com/news/articles/2023-12-15/blackrock-state-street-subpoenaed-in-house-esg-probe

https://www.foxbusiness.com/politics/blackrock-state-street-face-subpoenas-house-esg-probe