Major Financial Institutions Exit UN Climate Alliance, Citing Overreach and Legal Concerns

JPMorgan Chase, along with powerhouse investors BlackRock and State Street Global Advisors, have made the bold move to withdraw from or significantly reduce their involvement in the extensive Climate Action 100+ coalition, an initiative aimed at addressing global warming through corporate sustainability agreements.

JPMorgan Chase, headquartered in New York, justified its departure by highlighting its internal sustainability advancements and the establishment of its climate risk framework. BlackRock and State Street, managing trillions in assets, raised concerns about the alliance’s initiatives potentially encroaching on legal boundaries.

These decisive actions come amidst mounting pressure from consumer advocates and GOP-led states scrutinizing the environmental, social, and governance (ESG) priorities of major financial players.

JPMorgan Chase emphasized its robust sustainability team and evolving stewardship capabilities, leading to its decision to disengage from Climate Action 100+ engagements.

BlackRock opted to withdraw its U.S. operations from the alliance, redirecting focus to its international arm where most clients are pursuing decarbonization objectives.

Similarly, State Street exited the alliance due to conflicts between Climate Action 100+’s “phase 2” commitments and the firm’s internal investing policies.

Established in 2017 at the UN, Climate Action 100+ rallied the world’s top private sector financiers to align with greenhouse gas reduction efforts. With over 700 participating financial institutions managing a colossal $68 trillion in assets, the association aims to influence climate governance, carbon emission reduction, and financial disclosure policies.

The alliance’s “phase 2” agenda, slated for implementation this year, intensifies investor-company engagement to slash carbon footprints.

While Climate Action 100+ celebrates its growth and expanded engagement opportunities, it faces backlash from Republican circles alleging overreach and potential collusion.

GOP lawmakers have scrutinized the alliance’s activities, with House Judiciary Chairman Jim Jordan issuing a subpoena to Ceres, a key coalition member, over antitrust concerns.

In response to JPMorgan and State Street’s exits, Congressman Jordan hailed the decisions as victories for freedom and the American economy, echoing concerns about collusion.

Despite these withdrawals signaling a shift in financial priorities, consumer skepticism persists, with watchdog groups cautioning against premature trust in companies’ motives amid ongoing legal threats and public pressure.