Republican State Attorneys General Accuse Climate Action 100+ of Manipulating Markets and Inflating Energy Prices
JPMorgan Chase CEO Jamie Dimon (Getty Images)
America’s largest investment banks are fleeing a left-wing climate coalition ahead of a pending antitrust lawsuit against the group, in the latest blow to corporate environmental activism policies.
JP Morgan Chase, BlackRock, and State Street Advisors have all dropped out of the Climate Action 100+ network, a United Nations-backed coalition of some of the world’s largest asset managers, as reported by Fox News last week.
The exodus came as a group of Republican attorneys general are wrapping up a years-long investigation and preparing to file a major antitrust lawsuit against the left-wing climate network and its investment bank members this spring, the Washington Free Beacon has learned.
The news is the latest signal that industry leaders could be moving away from coordinated corporate environmental, social, and governance (ESG) policies due to concerns about legal fallout. The departures at Climate Action 100+ come as other industry-specific climate coalitions have been rocked by legal threats. Last spring, the Net-Zero Insurance Alliance, a U.N.-backed network of major insurance companies, lost nearly half its members after Republican attorneys general sent a warning that the group could be in violation of U.S. antitrust laws.
Climate Action 100+ was launched in 2017 with the goal of coordinating its members’ investment decisions to comply with global “Net Zero” carbon emissions standards. Critics say such coordination between global investors unfairly targets certain industries, such as oil and gas, and could harm consumers by inflating energy prices.
For the past three years, at least 20 state attorneys general have been investigating whether asset managers such as BlackRock engaged in illegal market manipulation.
One of them is Montana attorney general Austin Knudsen. He said companies that engage in such coordination could be “violating their fiduciary obligation.”
“The point of these investment groups is to make profit for their clients,” he told the Free Beacon. “They’re not supposed to be worrying about all these woke liberal issues that they’re now foisting upon boardrooms.”
Iowa attorney general Brenna Bird said she felt “very encouraged” after seeing major investors drop out of Climate Action 100+. She chalked up the departures to the “pressure that Republican AGs from around the country have been bringing.”
“Radical politics shouldn’t be guiding investment decisions,” she told the Free Beacon. “When a pension makes investment decisions based on politics, rather than return on investment and stability, that hurts people with pensions.”
Tennessee attorney general Jonathan Skrmetti, whose office is suing BlackRock in a first-of-its-kind consumer protection lawsuit related to ESG, said he was pleased to see companies reconsidering such policies.
“We’ve seen a significant trend recently in companies distancing themselves from the more aggressive commitments and ESG,” Skrmetti told the Free Beacon. “I think you’ll see asset managers and other financial institutions … using ESG as an option, rather than trying to retool their entire business model.”
“The concern that we had, collectively, with the Climate Alliance, and with some other coalitions, is the concentration of market power in the same direction, in a way that hurts consumers,” he added.
What are the potential consequences for consumers and the overall economy of alleged manipulation of energy prices through coordinated investment decisions?
Ion can manipulate markets and inflate energy prices, as well as potentially violate antitrust laws. The pending lawsuit by Republican state attorneys general is a significant development in the ongoing debate over climate activism and its impact on the economy.
The departure of JP Morgan Chase, BlackRock, and State Street Advisors from Climate Action 100+ is a clear indication that these major investment banks are distancing themselves from the coalition ahead of potential legal action. This move follows a trend of industry leaders reevaluating their involvement in coordinated ESG policies amid concerns about legal consequences.
The antitrust lawsuit being prepared by the Republican attorneys general raises important questions about the nature of corporate environmental activism. Critics argue that when investment decisions are coordinated across such a large network, it can distort the market and lead to increased energy prices. Such alleged manipulation of energy prices, if proven, could have significant consequences for consumers and the overall economy.
Furthermore, there are concerns that coordinated ESG policies may run afoul of antitrust laws. The warning sent to the Net-Zero Insurance Alliance by Republican attorneys general last year, which resulted in the loss of nearly half of its members, highlights the legal uncertainties surrounding these climate coalitions. This legal scrutiny serves as a further deterrent for industry leaders considering participation in such networks.
Climate Action 100+ was established in 2017 with the aim of aligning investment decisions with global “Net Zero” carbon emissions standards. While the goal of reducing carbon emissions is laudable, critics argue that coordination among asset managers can create a concentration of power that distorts markets and hinders competition.
As the Republican attorneys general prepare to file their antitrust lawsuit, it is clear that the debate over the role of climate activism in the corporate world is intensifying. While environmental and social concerns are important, it is equally crucial to consider the potential economic consequences of coordinated ESG policies. The pending lawsuit against Climate Action 100+ and its investment bank members will undoubtedly shape the future of corporate environmental activism and its impact on the economy.
It remains to be seen how the lawsuit will unfold and what implications it will have for other climate coalitions and their members. However, it is clear that the legal scrutiny faced by these networks reflects a growing concern among industry leaders about the potential risks associated with coordinated ESG policies. The outcome of this lawsuit will likely have far-reaching consequences for the future of climate activism in the corporate sector.
In conclusion, the withdrawal of major investment banks from Climate Action 100+ and the impending antitrust lawsuit by Republican state attorneys general highlight the legal and economic challenges facing corporate environmental activism. The alleged manipulation of markets and inflation of energy prices, as well as the potential violation of antitrust laws, raise significant concerns about the impact of coordinated ESG policies. The outcome of the lawsuit will undoubtedly shape the future of climate activism in the corporate world and its effects on the economy.
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