United Nations-Backed ESG "Cartel" Loses Trillions of Dollars in Support in a Single Day
Climate Action 100+ lost members who oversee trillions of dollars in assets within a few hours
The global environmental, social, and corporate governance (ESG) movement suffered a multi-trillion dollar blow today when some of the world’s largest asset managers overseeing trillions of dollars of investments pulled out of a multi-trillion dollar, United Nations-backed, left-wing coalition called Climate Action 100+ that’s derided by critics like Representative Jim Jordan as an ESG “cartel” that’s potentially violating antitrust laws.
The first blow was struck by JPMorgan Chase, the largest bank in the world, which announced this morning that its asset management arm will “withdraw from the largest investor coalition focused on convincing the corporate world to act on climate change,” per Reuters. JPMorgan isn’t alone, either. State Street is also withdrawing from Climate Action 100+, and even BlackRock, one of the global leaders in the ESG movement, is massively cutting back its support.
Climate Action 100+ is a United Nations climate alliance that is facing congressional scrutiny for its cartel-like behavior. The group was conceived of in 2016 by California Public Employees’ Retirement System (CalPERS) members at the, you can’t make this up, French Mission to the United Nations. The irony here, of course, is that CalPERS, as I’ve previously reported, invests millions of dollars in Chinese state-owned companies, while simultaneously helping to start a left-wing group that wants to shutter American businesses.
The California Public Employees' Retirement System (CalPERS) had more than $3 billion invested in Chinese companies, including 14 state-controlled enterprises blacklisted by the Trump administration, as of June 2020. Many of these companies are funding the Belt and Road Initiative, a massive infrastructure project Beijing is using to expand its geopolitical and military influence.
…
Two companies in the CalPERS portfolio—China Merchants Port and CITIC—control ports in Sri Lanka and Myanmar that the People's Liberation Army has used for military exercises. CalPERS had $3.7 million invested in China Merchants Port and $110 million in CITIC as of June 2020.
…
CalPERS had another $6 million invested in China Communications Construction Company, a state-owned company that U.S. officials have said is building military installations in the South China Sea in violation of agreements that China has with its neighbors.
Fast forward to a 2022 letter to Climate Action 100+’s steering committee members, Jordan wrote that “when companies agree to work together to punish disfavored views or industries, or to otherwise advance environmental, social, and governance (ESG) goals, this coordinated behavior may violate the antitrust laws and harm American consumers.”
The reasons for the cutbacks show how radical the ESG movement has become. Recently, Climate Action 100+ announced a new “phase 2” that it will implement this year, which “calls for member investors to actively engage with companies to reduce their carbon footprint,” per Fox Business.
This was one of the final straws for State Street in particular, which said that “SSGA has concluded the enhanced Climate Action 100+ phase 2 requirements for signatories are not consistent with our independent approach to proxy voting and portfolio company engagement.”
Unsurprisingly, some of ESG’s biggest foes celebrated the moves. Jordan hailed the decisions by “JPMorgan and State Street [as] big wins for freedom and the American economy, and we hope more financial institutions follow suit in abandoning collusive ESG actions.” Last summer, Jordan had issued subpoenas to Climate Action 100+ for its efforts “to advance environmental, social, and governance (ESG) policies.” His Judiciary Committee also celebrated today’s “BIG WIN.”
Will Hild, the head of Consumers Research, a group that has run extensive and viral ad campaigns against companies like Blackrock, said that “JP Morgan's departure is a necessary step in the right direction, but consumers should wait to trust the bank again. 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 effect.”
This is a massive deal that’s the result of a lot of litigation happening across America in the states and pressure in DC; it’ll be interesting to see what comes next with it.