Exclusive US House committee report finds Wall Street ‘conspired’ to reduce emissions

By Isla Binnie

NEW YORK (Reuters) – A U.S. Congressional committee will on Tuesday accuse Wall Street’s biggest firms, in a report seen by Reuters before its publication, of colluding with advocacy groups to force the companies to reduce their emissions of greenhouse gases.

The report is the first of its kind produced by the Republican-led Judiciary Committee in the House of Representatives since it launched an investigation in late 2022 into whether corporate efforts to combat climate change violate antitrust laws.

Several Republican-controlled states are already targeting Wall Street firms to join climate coalitions and market environmental, social and corporate governance (ESG)-focused investment products, fearing that these initiatives will harm jobs in the fossil fuel industry.

This is despite the world not having complied with an intergovernmental agreement reached in Paris in 2015 to keep global warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), in order to avoid the most catastrophic effects of climate change.

In the Judiciary Committee’s report, committee officials accuse President Joe Biden’s administration of failing to “meaningfully investigate climate cartel collusion, much less take enforcement action against its apparent violations of long-standing U.S. antitrust law.”

“The purpose of any investigation is to inform legislative reforms,” said a spokesman for Judiciary Committee Chairman Jim Jordan. The spokesperson declined to comment on any interactions with U.S. antitrust regulators regarding the report.

The report said it provided tentative conclusions and that the investigation continues.

The committee issued subpoenas for documents and interviewed former regulators during the investigation. Its report on Tuesday focused on Climate Action 100+, a group of more than 700 investors focused on getting companies to reduce emissions, and credited its investigation to several asset managers who ended their membership this year out of fear of an antitrust crackdown.

The report says that Climate Action 100+ “intimidates asset managers into joining” and pressures them to use their shareholder votes in support of climate proposals, seeking to reduce fossil fuel extraction and increasing energy prices for US consumers.

Climate Action 100+ did not immediately respond to a request for comment.

No antitrust lawsuits have been filed against any climate coalition of companies.

The report also targets the co-founders of Climate Action 100+, the California Public Employees Retirement System (CalPERS), and the climate-focused investor group Ceres for their critical support of Climate Action 100+. It says activist investor Arjuna Capital, a member, “seeks to destroy fossil fuel companies.”

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CalPERS and Arjuna did not immediately respond to requests for comment. Ceres did not immediately provide comment.

The report cited work plans, meeting minutes and other documents obtained, including an email between Ceres directors comparing their work and that of Climate Action 100+ to “the global Navy” and “the Army’s ground troops.”

Another internal email referenced a plan by Climate Action 100+ to replace board members at oil and gas company Exxon Mobil and said this effort would “show that (Climate Action 100+) has strength.”

Exxon did not immediately respond to a request for comment.

The report also criticized the world’s three largest asset managers, BlackRock, Vanguard and State Street, as members of the “climate cartel”.

Representatives for BlackRock, State Street and Vanguard did not immediately respond to requests for comment.

The committee called witnesses, including Ceres President Mindy Lubber, to appear at a public hearing on June 12.

(Reporting by Isla Binnie in New York; Editing by Nick Zieminski)