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Top US Asset Managers Feared Climate Initiative Would Invite Regulatory Scrutiny
Top US asset managers have been worried about signing up to an industry climate initiative, fearing it would create the appearance of being too closely aligned with climate activism and draw regulatory scrutiny. This is according to a report released by a Republican-led US congressional committee. The report suggests that major fund firms like BlackRock and State Street have always been concerned about appearing to collude with shareholder groups pushing for reduced emissions. BlackRock allegedly referred to collective action and engagement as “too risky” in 2019, while State Street expressed concern in 2020 about raising the “perception of engaging or voting as a block”.
Both firms have denied wrongdoing and joined the Climate Action 100+, a Ceres-backed initiative, before eventually stepping back due to independence concerns. The report has raised suspicions among Republican officials who are critical of investors coordinating with activist groups to push companies on climate issues at the expense of corporate growth and returns. The 11 attorneys general from oil-producing states have sued BlackRock, State Street, and Vanguard, claiming their climate activism has reduced coal production and boosted energy prices.