JPMorgan and State Street have both retracted their investment departments’ involvement with Climate Action 100+, an investor coalition that aims to lower corporate emissions, while Blackrock has also reportedly limited its involvement with the initiative, transferring its membership to its international arm.
A number of additional companies reportedly have left CA100+ with the coalition's recent shift to its second phase of action, which includes asset firms working with large companies such as ExxonMobil and Walmart to reduce climate impacts. According to a New York Times report, the departures reportedly respond to the coalition’s plea for signatories to take stronger action on companies lagging behind on climate commitments.
Firms also cited concerns that clients may take legal action against pressures to decarbonize and claimed the coalition could limit their ability to work independently.
"As BlackRock made clear when signing up as a member of CA100+ in 2020, at all times the firm maintains independence acting on behalf of clients, including in choosing which issuers to engage with, and how to vote proxies," said the company in a press release.
CA 100+ includes a three-part commitment for investors to work with companies as they transition operations to meet Paris Agreement targets. This includes the implementation of a governance framework for oversight of climate change risk, action to reduce emissions across the value chain, and enhanced corporate disclosure on climate targets.
Altogether, the recent decision takes away about $14 trillion in assets representing Wall Street climate action. While the companies did not admit to political motives, reports suggest that Republican attacks on corporations' environmental pledges may have influenced the recent departures.
CA 100+ reportedly expected some signatories to leave the coalition as it adopts new priorities for mitigating investment exposure to climate risk and encouraging investors to ensure their businesses are making necessary emissions reductions.
According to a Reuters report, 13 firms had already left CA100+ since its founding in 2017, but overall membership has grown to more than 700 firms, including 60 new firms that joined in the fall of 2023.
While a number of companies have found benefits from committing to renewable energy and supporting sustainable growth, many companies continue to fall short of climate targets. The recently released CDP scorecard revealed that companies like Aramco, Berkshire Hathaway, Tesla, Exxon Mobil, and Chevron have largely failed to respond to calls for greater ESG transparency.
With investors increasingly considering environmental disclosures and climate risk, improved ESG transparency and sustainability initiatives will likely remain part of business strategies.
