US House committee report finds Wall Street 'colluded' to curb emissions
11/06/2024 20:55
(Updates lead to show report now published, adds comment from
Vanguard in final paragraph)
By Isla Binnie
June 11 (Reuters) - 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
XOM.N , and said this effort would "show (Climate Action 100+)
has teeth."
The report also criticized the world's three biggest asset
managers, BlackRock BLK.N , Vanguard and State Street STT.N ,
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.
(Reporting by Isla Binnie in New York
Editing by Nick Zieminski, William Maclean)
((isla.binnie@thomsonreuters.com; Reuters Messaging:
isla.binnie.thomsonreuters.com@reuters.net))