US House panel finds BlackRock and other asset managers hesitant to join climate initiative

According to a report published Friday by a Republican led U.S. Congressional Committee, top asset managers in the United States are concerned that signing up for an industry climate initiative will make them look like they're working together too closely and attract regulatory scrutiny.

This is the latest report released by the majority of the Republican panel as part of an investigation they claim has revealed that fund firms and activists were part of a 'climate cartel' who colluded through shareholder groups pressing for emissions reductions. Democrats on the committee have denied these allegations.

Top fund firms deny wrongdoing. However, the material cited by the report indicates that they were always concerned about appearing to be too cozy with shareholder organizations engaged in climate activism.

BlackRock's 2019 view was "We don't engage in collective action or engagements." The report cites an email summary obtained by the committee of a meeting between unidentified BlackRock executives and Ceres, an environmental advocacy group based in Boston.

State Street, too, expressed concerns about "collusion", if it joined Ceres' effort to pressure companies to reduce emissions called Climate Action 100+. The report says that the firm was concerned about "the perception of voting or engaging as a bloc" if it joined a Ceres-backed effort to press companies to cut emissions known as the Climate Action 100+.

BlackRock has declined to comment. State Street and Ceres declined to comment immediately. Both joined the CA100+ group, but resigned earlier this year due to concerns about their independence.

Many Republican officials from oil-producing states have objected that investors are coordinating their efforts to put pressure on corporate management to address climate change issues, at the expense and return of growth and profits.

In the last month, Republican Attorneys General from 11 states filed a lawsuit against BlackRock, State Street, and Vanguard. They claimed that their climate activism had reduced coal production and increased energy prices. These firms manage a combined $26 trillion. BlackRock, State Street and Vanguard have all denied any wrongdoing.

Donald Trump, the U.S. President-elect, campaigned against Joe Biden's efforts to combat climate change. He also promised to increase U.S. production of oil and gas. Theoretically, Trump's administration can follow up on the findings of the congressional committee. A spokesperson for Congress declined to comment about any discussions it had with the current or future administrations. (Reporting from Isla Binne in New York, and Ross Kerber in Boston. Editing by David Gregorio.)

(source: Reuters)