US House of Representatives panel finds BlackRock, other asset managers leery of joining climate initiative. By Reuters

Authors: Isla Binnie and Ross Kerber

NEW YORK/BOSTON (Reuters) – Top U.S. asset managers are concerned that signing on to the industry’s climate change initiative could make them appear to be cooperating too closely and attract regulatory scrutiny, according to a report released on Friday by a Republican-led U.S. congressional committee. .

The report is the latest to be released by the panel’s Republican majority as part of an investigation they say has shown fund firms and activists are part of a “climate cartel” colluding through shareholder organizations that press for emissions cuts. Democrats on the committee rejected the allegations.

The biggest fund companies have denied wrongdoing, but material cited in the report shows they have always been concerned about appearing too cozy with climate activist shareholder groups.

BlackRock’s (NISE:) position in 2019 was that “we don’t do collective actions/engagements. Too risky,” the report said, citing an emailed summary of a meeting that unidentified BlackRock executives held with Ceres, a Boston-based environmental group, obtained by the committee.

Likewise State street (NISE:) also raised concerns around 2020 about “collusion” if it joins Ceres-backed efforts to pressure companies to cut emissions known as climate Action (VA:) 100+, according to the report. The firm is concerned about raising “the perception of engagement or voting as blocking,” the report said.

BlackRock declined to comment. State Street and Ceres did not immediately comment. Both joined a group known as CA100+, then withdrew earlier this year citing concerns about independence.

Republican officials, many of them from oil and gas-producing states, have opposed investors coordinating to pressure corporate governance on climate issues at the expense of corporate growth and returns.

Last month, Republican attorneys general from 11 states sued BlackRock, State Street and Vanguard, saying their climate activism reduced coal production and increased energy prices. The firms collectively manage $26 trillion. BlackRock and State Street denied wrongdoing, while Vanguard declined to comment on the matter.

US President-elect Donald Trump campaigned against President Joe Biden’s moves to combat climate change and promised to increase US oil and gas production. In theory, the Trump administration could follow up on the congressional committee’s findings. A spokesman for the committee declined to comment on any discussions he may have had with the current or future administration.