JPMorgan and State Street leave the Climate Initiative; BlackRock Takes a Backseat
JPMorgan Chase’s and State Street’s investment arms both withdrew from a global investor coalition that nudges companies to reduce climate-damaging emissions. BlackRock, in the meantime, stated that it shifted its membership to its international arm, reducing its involvement. These decisions removed almost $14 trillion in total assets from efforts to coordinate Wall Street’s action on climate change. The move followed the coalition, known as Climate Action 100+ (CA100+), asking members to take stronger action against companies lagging in emission reduction.
Financial firms have faced pressure from Republican politicians, who claim commitment to shared action could breach antitrust law or fiduciary duty. None of the firms mentioned politics as a motivation. State Street Global Advisors (SSGA), managing $4.1 trillion, stated that CA100+’s new priorities threatened its ability to act independently.
CA100+’s priorities, adopted in June, called for signatories to engage with policymakers and disclose talks with companies to achieve zero net emissions by 2050. State Street and JPMorgan cited these changes as inconsistent with their independent approach to proxy voting and engagement.
JPMorgan’s fund arm, managing $3.1 trillion, chose not to renew CA100+ membership, citing the development of its own investment stewardship capabilities. BlackRock clarified it is no longer a CA100+ member but shifted its membership to BlackRock International, removing $6.6 trillion, or two-thirds of its assets, from CA100+.
Despite the departures, CA100+ intends to continue its efforts. While some firms left due to concerns over independence, environmental groups criticised the moves, viewing them as yielding to political pressure. Republican attorneys general previously questioned large U.S. asset managers about potential unlawful coordination within CA100+. The development raises questions about whether similar groups will remain vocal and aggressive or adopt a less assertive stance in the face of changing market dynamics.
