CNBC/Jamie Dimon
- Wall Street giants like JPMorgan, State Street, and Pimco recently exited Climate Action 100+.
- Other finance firms have walked back climate-friendly pledges and initiatives.
- This shift comes amid increasing criticism of "woke capitalism" and scrutiny of ESG investing.
Some Wall Street giants, many of which have spent the last few years pledging to fight climate change through corporate responsibility, are now retreating from some of their environmental initiatives.
Large financial institutions including investment bank JPMorgan, asset manager State Street, and investment management firm Pimco have in the last few days pulled out of Climate Action 100+, a group of hundreds of institutional investors that collectively push large companies to address climate issues.
The departures are a stark change for finance firms that have previously spent years working to improve their public images by loudly championing the fight against climate crisis, The New York Times reported.
Indeed, big banks and asset managers previously built up teams in a bet that environmental, social, and governance (ESG) investing was a good bet — both morally and economically.
In recent months, however, many financial intuitions have come under more fire from Republicans criticizing their climate work, framing it and other ESG initiatives as "woke capitalism," Politico reported. Regulators, meanwhile, have begun looking more closely at firms offering ESG products.
Other concerns included that clients may disapprove of the work and sue, or that this many large companies working together to pressure change in other companies could fly in the face of antitrust regulations, the New York Times said.
Founded in 2017, Climate Action 100+ initially launched as a five-year initiative that in 2022 was extended until 2030. The coalition brings together more than 700 members with more than $68 trillion in assets under management to persuade public companies to increase shareholder value by improving climate crisis governance, cutting emissions, and strengthening climate-related financial disclosures, according to its website.
In its new phase launched in 2022, Climate Action 100+ shifted its focus from pushing companies to improve their financial disclosures to pushing companies to introduce more climate-friendly business operations and reduce their net carbon emissions.
Following the departures of JPMorgan, State Street, and Pimco, financial investors including Neuberger Berman, William Blair Investment Management, and Wellington Management remain members of Climate Action 100+, whose targeted companies include American Airlines, Chevron, and Procter & Gamble.
Other finance giants have similarly stepped back from previous environmentally friendly initiatives, The New York Times reported. They include BlackRock, which scaled back its participation with Climate Action 100+ in recent weeks, as well as Bank of America, which walked back a pledge to stop financing coal.