JPMorgan, State Street Pull Out of ‘Woke’ Investment Climate Pact

JPMorgan Chase Bank is seen in New York City on March 21, 2023. Caitlin Ochs/Reuters

JPMorgan Chase’s asset management arm and State Street Global Advisors say they have withdrawn from the United Nations-led climate pact that’s focused on prodding companies to pursue environmental goals.

The decisions, announced in statements provided to The Epoch Times, represent a blow to the climate pact, known as Climate Action 100+, an alliance of roughly 700 institutional investors with $68 trillion under management that was established in 2017 under U.N. guidance.

The pact, led by a global steering committee guided by “equality, diversity, and inclusion,” uses shareholder influence to pressure companies into strengthening governance on climate change, reducing greenhouse gas emissions, and adopting more stringent climate-related financial disclosures.

Opponents of Climate Action 100+ have argued that the alliance pushes companies to adopt “woke” investment priorities, to the detriment of profitability, the economy, and fiduciary duty to shareholders.

“Today’s decisions by JPMorgan and State Street are big wins for freedom and the American economy, and we hope more financial institutions follow suit in abandoning collusive ESG [environmental, social, and corporate governance] actions,” Rep. Jim Jordan (R-Ohio) said in a statement on X, formerly known as Twitter.

Last summer, Mr. Jordan issued a subpoena to Ceres, a nonprofit advocacy group that helps oversee Climate Action 100+, accusing the climate alliance of facilitating companies’ adoption of ESG objectives in ways that may violate U.S. antitrust law.

A number of state attorneys general, who last year warned 53 asset managers with $40 billion under management not to put ideology ahead of the fiduciary interests of clients, praised the decision of JPMorgan’s asset arm and State Street to exit the climate pact.

“Companies serve investors better when they transparently commit to ROI [return on investment], not to ideological goals,” Jonathan Skrmetti, Tennessee attorney general, wrote in a post on X.

“The ESG sham is unraveling. My colleagues and I will continue to lead the fight for businesses and consumers who reject the ideology of the climate cabal,” Alabama Attorney General Steve Marshall said in a post on social media.

Iowa Attorney General Brenna Bird said in a post on X that her state “proudly stands against woke ESG policies that cripple our economy & bankrupt Americans.”

“Radical political agendas shouldn’t drive investment decisions. We applaud JPMorgan for leaving Climate Action 100+ & putting customers’ financial prosperity first,” she added.

In their letter to asset managers, the attorneys general said that “potential unlawful coordination appears throughout Climate Action 100+’s documents,” while calling the group’s actions a “transparent attempt to push policies through the financial system that cannot be achieved at the ballot box.”

A spokesperson for Climate Action 100+ told The Epoch Times in an emailed statement that the group can confirm that JPMorgan’s asset management unit and State Street Global Advisors “have left the initiative.”

However, the spokesperson noted that the climate pact has experienced “remarkable growth” since its inception and that “we expect strong interest to continue.”

Last fall, more than 60 new signatories joined, with the spokesperson adding that the 700-plus investors that are part of the pact remain “committed to engaging 170 companies” on climate action.

More Details

A spokesperson for JPMorgan Asset Management (JPMAM), which manages roughly $3.1 trillion, told The Epoch Times in an emailed statement that it decided not to renew its membership in the Climate Action 100+ pact because it has developed its own “climate risk engagement framework” and made significant investments in its “engagement capabilities.”

“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 spokesperson said.

“Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”

State Street, which has some $4.1 trillion under management, told The Epoch Times that its decision to leave the climate pact is because it objects to some of the group’s enhanced “phase two“ commitments, which it says threaten its ability to act independently.

“After careful review, State Street Global Advisors has concluded the enhanced Climate Action 100+ Phase 2 requirements for signatories will not be consistent with our independent approach to proxy voting and portfolio company engagement. As a result, we have decided to withdraw from Climate Action 100+,” the spokesperson said in an emailed statement.

The phase two commitments call for Climate Action 100+ signatories to dial up pressure on companies to act to fight climate change, a step beyond the earlier focus on climate-related financial disclosures.

“In phase two the overarching goal is to go from words to action,” Francois Humbert, chair of CA100+’s Steering Committee and engagement manager at Generali Investments, told Reuters last year.

Phase two will require “10 times more effort” and need people with “lots of engagement experience and a bit more grey hair,” he added.

BlackRock, the world’s biggest asset manager with roughly $9.1 trillion under management, also is leaving Climate Action 100+ and transferring its participation to one of its smaller units, according to the Financial Times.

ESG Policies Threaten Food Supply: Think Tank

Elsewhere, a report from The Buckeye Institute, a conservative-leaning think tank, sounded the alarm on the Biden administration’s net-zero climate-control policies and agenda items, which the group argues threaten U.S. food production.

The report, released on Feb. 7, found that the climate policies and mandates guided by the ESG agenda pushed by the Biden administration carry a hefty price tag for American farmers and consumers.

The researchers found that U.S. farmers will see their operational costs rise by an estimated 34 percent as a result of the Biden administration’s net-zero emissions policies.

Not only did the model predict that the government’s carbon pricing policies would raise farm operating costs, but consumers also would face a hit to their wallets.

“Carbon pricing will increase the average U.S. grocery bill by $110 per month, $1,330 annually, or 15 percent,” the researchers estimated.

People shop in a grocery store in Los Angeles on Oct. 12, 2023. Mario Tama/Getty Images

In order to achieve the climate pact’s objectives, the Biden administration committed to cutting U.S. greenhouse gas emissions by 50 to 52 percent by 2030 and to reach economy-wide net-zero emissions by 2050.

“Achieving the administration’s desired decarbonized economy will require aggressive climate-emission reduction policies that drain and replace fossil fuels from every sector of the U.S. economy,” the report’s authors wrote.

The Biden administration has already started implementing stringent regulatory policies meant to cut carbon emissions from America’s energy industry, while a looming final rule on ESG reporting, due to enter into force in April, threatens to push carbon compliance onto other industries.

Earlier, a dozen Republican state agriculture commissioners warned in a Jan. 29 letter to top bank executives that membership in the U.N. Net-Zero Banking Alliance would negatively affect farmers and threaten U.S. food security.