US House Report: Wall Street Accused of 'Collusion' to Curb Emissions

Congressional Report Alleges Collusion Among Wall Street Firms to Cut Emissions

A U.S. congressional committee is set to accuse major Wall Street firms of collaborating with advocacy groups to pressure companies into reducing their greenhouse gas emissions, according to a report obtained by Reuters. This marks the first such report from the Republican-led Judiciary Committee in the House of Representatives since it began investigating potential antitrust violations in corporate climate initiatives in late 2022.

Republican-led states have already expressed concerns about Wall Street’s participation in climate coalitions and ESG-focused investments, fearing potential harm to fossil fuel industry jobs. These actions hold weight in light of global challenges to meet the 2015 Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius.

The Judiciary Committee's report criticizes President Joe Biden's administration for not adequately investigating or enforcing actions against what it terms the "climate cartel." According to a spokesperson for Committee Chair Jim Jordan, the investigation aims to inform legislative changes. However, the spokesperson did not comment on any interactions with U.S. antitrust regulators regarding the report.

The report, which presents interim findings from an ongoing investigation, highlights Climate Action 100+, a consortium of over 700 investors urging companies to lower their emissions. The report credits the investigation with leading several asset managers to exit the coalition this year due to fears of antitrust repercussions. Climate Action 100+ is accused of pressuring asset managers to support climate proposals through shareholder votes, ultimately targeting fossil fuel reduction and affecting energy prices for U.S. consumers.

Climate Action 100+ and other implicated groups like the California Public Employees Retirement System (CalPERS), climate-focused investor group Ceres, and activist investor Arjuna Capital, have yet to respond to requests for comment. The report also references internal communications among Ceres directors likening their efforts to military operations, and notes a plan by Climate Action 100+ to potentially replace Exxon Mobil board members.

The committee also criticizes major asset managers BlackRock, Vanguard, and State Street as part of the so-called "climate cartel." None of these firms have responded to the allegations. The Judiciary Committee has called witnesses including Ceres President Mindy Lubber to testify at a public hearing scheduled for June 12.

As the investigation continues, the committee's findings could shape future legislative responses to corporate climate initiatives and their compliance with antitrust laws.