House Republicans released a report accusing major investment firms of colluding with climate groups to push for environmentally friendly investing, sparking a new controversy over ESG practices.
House Judiciary Committee Republicans claim BlackRock, State Street, and Vanguard are part of a “climate cartel.”
The report targets activist group Climate Action 100+ for allegedly pressuring asset managers to adopt climate-focused investments.
The GOP criticizes the Biden administration for not investigating these alleged collusions.
Key quote:
“Investors who undertake investor stewardship on climate change are pursuing a common-sense approach driven by the pursuit of delivering the best long-term returns for their clients and beneficiaries.”
— Climate Action 100+ spokesperson
Why this matters:
This controversy highlights the political tension over ESG investing, which influences how major firms allocate resources and address climate change. With extreme weather events becoming more frequent and severe, the urgency for sustainable solutions has never been greater. Advocates argue that the financial sector must play a pivotal role in this transformation by redirecting capital towards projects and companies that support a low-carbon future.
More than 1,400 Vanguard investors have signed a letter to the firm’s general counsel, accusing it of violating its fiduciary duty to mitigate the financial risks of climate change.
GOP state attorneys general are taking legal action to prevent investment firm Vanguard from buying publicly traded utility shares over concerns that its climate change activism could raise prices and decrease energy reliability.
Billionaire hedge fund manager Christopher Hohn has accused BlackRock and Vanguard of acting like sheep when it comes to climate change, arguing that large asset managers are taking "insufficient and ineffective action" on global warming.
Vanguard Group, the world's largest mutual fund manager, backed shareholder resolutions for shippers United Parcel Service Inc and J.B. Hunt Transport Services Inc and oil driller Ovintiv Inc to limit their climate-warming emissions.
