A U.S. congressional committee accused the biggest Wall Street firms on Tuesday, in a report seen by Reuters ahead of its publication, of colluding with advocacy groups to force companies to shrink their greenhouse gas emissions.
The report is the first of its kind produced by the Republican-led Judiciary Committee in the House of Representatives since it launched an investigation in late 2022 into whether corporate efforts to tackle climate change violate antitrust laws.
Several Republican-controlled states have been already targeting Wall Street firms for entering into climate coalitions and marketing environmental, social and corporate governance (ESG)-focused investment products, fretting that these initiatives will harm jobs in the fossil fuel industry.
This is despite the world failing to live up to an intergovernmental agreement reached in Paris in 2015 to keep global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit) so it can avoid the most catastrophic effects of climate change.
In the Judiciary Committee’s report, the committee staff accuse President Joe Biden’s administration of failing to “meaningfully investigate the climate cartel’s collusion, let alone bring enforcement actions against its apparent violations of longstanding U.S. antitrust law.”
A White House spokesperson did not immediately respond to a request for comment.
“The goal of any investigation is to inform legislative reforms,” a spokesperson for Judiciary Committee chair Jim Jordan said.
While legislation is unlikely as long as Democrats control the White House and the Senate, any bill the committee comes up with could offer hints at what a new administration led by Republican Donald Trump could try to implement if he prevails in November’s U.S. election.
No antitrust lawsuit has been brought against any climate coalition of companies. The spokesperson for Jordan declined to comment on any interactions with U.S. antitrust regulators regarding the report. The U.S. Department of Justice and the Federal Trade Commission, which oversee antitrust reviews, did not immediately respond to requests for comment.
The report said it provided interim findings and that the investigation is continuing.
The committee issued subpoenas for documents and interviewed former regulators during the investigation. Its report on Tuesday focused on Climate Action 100+, a grouping of more than 700 investors focused on getting companies to curb emissions, and credited its investigation for several asset managers ending their membership this year for fear of an antitrust crackdown.
The report says Climate Action 100+ “bullies asset managers to join” and presses them to use their shareholder votes in support of climate proposals, seeking to reduce fossil fuel extraction and raising energy prices for U.S. consumers.
A spokesperson for Climate Action 100+ said its aims to undertake investor stewardship on climate change were misunderstood in the political discourse, and that its investors were “independent fiduciaries, responsible for their individual investment and voting decisions.”
“As the world’s largest investor-led engagement initiative, Climate Action 100+ will be scrutinized … But any scrutiny must be fair, accurate, and based on facts,” the spokesperson said.
CALPERS, CERES
The committee’s report also takes aim at Climate Action 100+ co-founders, the California Public Employees Retirement System (CalPERS) and climate-focused investor group Ceres for their key support of Climate Action 100+. It says activist investor Arjuna Capital, a member, “seeks to destroy fossil fuel companies.”
The committee has called witnesses including Ceres president Mindy Lubber to appear at a public hearing on June 12.
Ceres said in a statement that the hearing is part of a “larger political campaign from opponents of climate action” who want “to ban investors from considering climate-related financial risk in decision-making.”
A CalPERS spokesperson said it was “proud to participate” in initiatives like Climate Action 100+. “This is not collusion; it is collaboration,” the spokesman said.
Arjuna did not immediately respond to a request for comment.
The report cited work plans, meeting minutes and other documents it obtained, including an email between Ceres directors comparing their work and that of Climate Action 100+ to “the global Navy” and “the Army ground troops.”
Another internal email referenced a Climate Action 100+ plan to replace board members at oil and gas firm Exxon Mobil, and said this effort would “show (Climate Action 100+) has teeth.”
The report also criticized the world’s three biggest asset managers, BlackRock, Vanguard and State Street, as members of the “climate cartel.”
Representatives for BlackRock and State Street did not immediately provide comment. A Vanguard spokesperson said the firm’s “mission is to help individual investors achieve their financial goals” and it remained committed to cooperating with the committee’s requests.
(Reuters reporting by Isla Binnie in New York Editing by Nick Zieminski, William Maclean)
