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JPMorgan Asset Management (NYSE:JPM) and State Street Global Advisors (STT) dealt a heavy blow this week by announcing their decision to depart from Climate Action 100+, a $68 trillion investor group established to advocate for shareholder influence in pressuring major producers of greenhouse gases to reduce emissions. The move marks a significant setback to investor activism in the realm of climate change.
This retreat comes as BlackRock (BLK), another top global asset manager, indicated its plan to scale back participation in the group, resulting in none of the world’s five largest asset managers fully endorsing the activist pursuit.
JPMorgan (JPM) cited its substantial investment in developing an independent climate risk engagement framework, signaling a pivot towards an individualized approach to addressing climate-related concerns. On the other hand, State Street (STT) and BlackRock (BLK) expressed objections to the “Phase 2” corporate engagement strategy of the climate group, contending that it conflicts with U.S. laws mandating money managers to act solely in the long-term economic interest of their clients.
Notably, Climate Action 100+ declared its shift in focus from pressuring companies on climate disclosures to advocating for active emissions reduction last year. However, the group has experienced departures due to mounting opposition from Republican state attorneys general and lawmakers averse to environmental, social, and governance (ESG) investing.
While Vanguard and Fidelity Investments have never been part of Climate Action 100+, Goldman Sachs, Invesco, and Pimco stand among other major U.S. asset managers who are continuing their association with the group.
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