By Isla Binnie
(Reuters) -The Republican majority on a U.S. congressional committee released a report on Tuesday accusing Wall Street firms of conspiring with special interest groups to force companies to reduce their greenhouse gas emissions.
The commission’s report, previously reported by Reuters, is the first since it launched an investigation in 2022 into whether companies’ efforts to tackle climate change violate antitrust laws.
Several Republican-controlled states have targeted Wall Street firms for forming climate coalitions and marketing environmental, social and corporate governance (ESG)-focused investment products, fearing that these initiatives will impact jobs in the fossil fuel industry will harm.
This is despite the world’s failure to adhere to an intergovernmental agreement reached in Paris in 2015 to keep global warming at 1.5 degrees Celsius (2.7 degrees Fahrenheit), leaving the most catastrophic consequences of climate change can be avoided.
In the report, Republican lawmakers accuse President Joe Biden’s administration of failing “to meaningfully investigate the climate cartel conspiracy, let alone take enforcement action against its apparent violations of long-standing U.S. antitrust law.” ”
A White House spokesperson did not immediately respond to a request for comment. Congressman Jerrold Nadler, a Democrat who serves on the House Judiciary Committee that authored the report, dismissed its findings in a document seen by Reuters.
“There is no theory of antitrust law that prevents private investors from working together to identify the risks associated with climate change,” Nadler wrote in the foreword to a document drafted by Democrats in response.
While anti-ESG legislation is unlikely as long as Democrats control the White House and Senate, any recommendation from the committee could shed light on what a new administration led by Republican Donald Trump might try to implement if he prevails in the US elections in November. .
“The purpose of any investigation is to inform legislative reform,” said Jim Jordan, a spokesman for the Judiciary Committee chairman.
No antitrust case has been filed against any climate coalition of companies. Jordan’s spokesperson 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 investigations, did not immediately respond to requests for comment.
The committee’s report states that interim findings have been made and that the investigation is continuing. Democrats argued in their rebuttal that coordination on climate efforts promotes competition by creating a common emissions disclosure framework so asset managers can operate with lower compliance costs and their clients can better compare their performance.
The committee has issued subpoenas for documents and interviewed former supervisors. Republicans focused much of the committee’s report on Climate Action 100+, a group of more than 700 investors focused on getting companies to cut emissions. They attribute their investigation to several asset managers canceling their membership this year for fear of a crackdown by competition authorities.
The committee’s report says Climate Action 100+ is “forcing asset managers to join” and urges them to use their shareholder votes to support climate proposals, reduce fossil fuel extraction and lower energy prices for U.S. increase consumers.
A spokesperson for Climate Action 100+ said Climate Action 100+’s climate change goals were misunderstood in political discourse, and that the 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 investigation must be fair, accurate and based on facts,” the spokesperson said.
CALPERS, CERES
Also in the Republicans’ crosshairs were the co-founders of Climate Action 100+, the California Public Employees Retirement System (CalPERS) and the climate-focused investor group Ceres for their significant support of Climate Action 100+. It says activist investor Arjuna Capital, a member, is “trying 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 to ban investors from considering climate-related financial risks.
A CalPERS spokesperson said they are proud to participate in initiatives like Climate Action 100+. “This is not a conspiracy; it is collaboration,” the spokesperson said.
Arjuna did not immediately respond to a request for comment.
The committee’s report cited work plans, meeting minutes and other documents the committee obtained, including an internal email referencing a Climate Action 100+ plan to replace board members of oil and gas company Exxon Mobil, which stated said this effort would ‘demonstrate’ (Climate Action 100+) has teeth.”
Republicans described the world’s three largest asset managers, BlackRock, Vanguard and State Street, as members of a climate cartel.
Representatives for BlackRock and State Street did not immediately comment. A spokesperson for Vanguard said the company’s “mission is to help individual investors achieve their financial goals” and that it remains committed to cooperating with the commission’s requests.
(Reporting by Isla Binnie in New York; Editing by William Maclean and Stephen Coates)
