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JPMorgan Chase and institutional investors BlackRock and State Street Global Advisors said Thursday they are giving up, or as in the case, their stake in a massive United Nations climate alliance created to combat global warming through corporate sustainability agreements from BlackRock, will be significantly reduced.
In a statement, New York-based JPMorgan Chase said it would exit the so-called Climate Action 100+ investor group due to expanding its internal sustainability team and establishing its climate risk framework in recent years. BlackRock and State Street, both of which manage trillions of dollars in assets, said the alliance's climate initiatives had gone too far and also raised concerns about potential legal problems.
The surprise announcements come at a time when the largest financial institutions in the U.S. and around the world are facing intense pressure from consumer advocates and Republican states over their environmental, social and governance (ESG) priorities.
“The firm has built a team of 40 dedicated sustainable investing professionals, including investment stewardship specialists, who also leverage one of the largest buy-side research teams in the industry,” the bank said in a statement shared with FOX Business became. “Given these strengths and developing its own stewardship capabilities, JPMAM has decided that it will no longer engage in Climate Action 100+ engagements.”
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JPMorgan Chase CEO Jamie Dimon, left, and BlackRock CEO Larry Fink (Getty Images/Getty Images)
BlackRock, meanwhile, has withdrawn its U.S. business from Climate Action 100+ and shifted its stake in the alliance to BlackRock's smaller international unit, where the majority of clients pursue decarbonization goals, the Financial Times first reported on Thursday. A BlackRock spokesperson confirmed to FOX Business that the move was made in recent weeks.
And State Street said the exit from the alliance came because Climate Action 100+'s “Phase 2” commitments conflicted with the company's internal investment policies.
Jamie Dimon, the CEO of JPMorgan Chase, testifies during a hearing of the Senate Committee on Banking, Housing and Urban Affairs on December 6, 2023. (Tom Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)
“SSGA has concluded that Climate Action 100+’s expanded Phase 2 requirements for signatories are inconsistent with our independent approach to proxy voting and portfolio company engagement,” State Street said in a statement, according to the Financial Times.
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Climate Action 100+ was officially launched at the United Nations in December 2017 to bring together the world's largest private funders of greenhouse gas producers. Since the association's inception, it has grown to include more than 700 financial institutions, collectively responsible for a staggering $68 trillion in assets under management.
Activists protest in front of BlackRock headquarters in New York City. (Erik McGregor/LightRocket via Getty Images / Getty Images)
The group – which is overseen by a non-governmental steering committee of ESG activists – calls on its members to urge companies to “improve climate change governance,” curb carbon emissions and strengthen climate-related financial disclosure policies. Its actions largely targeted investments that benefited the oil and gas industry while promoting green energy investment strategies.
Climate Action 100+'s “Phase 2” strategy, due to be implemented later this year, calls on member investors to actively work with companies to reduce their carbon footprint.
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“More than 700 investors are committed to managing climate risks and preserving shareholder value through their participation in the initiative,” a spokesperson for Climate Action 100+ told FOX Business on Thursday. “Since its inception, Climate Action 100+ has experienced remarkable growth – and that has only continued.”
“The initiative recently entered its second phase, providing more opportunities for investor signatories to participate,” the spokesperson continued. “More than 60 new signatories joined last fall alone, and we expect interest to continue to grow.”
Delegates applaud after the conclusion of the recent United Nations climate summit on December 13, 2023 in Dubai, United Arab Emirates. The conference covered various agreements by financial institutions to curb investments in the fossil fuel sector… (Fadel Dawod/Getty Images / Getty Images)
Climate Action 100+, along with other global climate alliances and investor networks, has drawn the ire of Republican states and lawmakers who have argued that their activities could interfere with government policymaking. They have also warned that such associations harm domestic energy companies that employ thousands of Americans and keep consumer prices low.
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In June, House Judiciary Chairman Jim Jordan of Ohio issued a subpoena to Ceres, a nonprofit advocacy group that helps monitor Climate Action 100+, alleging the group may be promoting and violating collusion through its climate-focused initiatives against the US antitrust law.
House Judiciary Committee Chairman Jim Jordan, R-Ohio, is pictured during a hearing on March 9, 2023. (Tom Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)
“Today’s decisions from JPMorgan and State Street are major wins for freedom and the American economy, and we hope other financial institutions follow suit and forego collusive ESG actions,” Jordan wrote in a social media post on Thursday on X
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Additionally, in recent months, state attorneys general, tax officials and agriculture commissioners have joined forces to threaten legal action related to banks' participation in climate alliances.
“The departure of JPMorgan, State Street and BlackRock is a necessary step in the right direction, but consumers should wait until they trust these companies again,” said Will Hild, executive director of Consumers Research. “By leaving the Climate Action 100+ climate cartel, they are signaling that the actions of millions of consumers and dozens of elected officials are having an impact.”
“These asset management firms are clearly afraid of the bad press and legal action that will be taken against their destructive net zero push,” Hild added.