Wall Street adopts new defense against attacks on ESG

investmentnews.com:

Climate alliances backed by Wall Street heavyweights have struck upon a subtle way to blunt increasingly aggressive attacks by the GOP.

This month, a $3.3 trillion alliance calling itself the Paris Aligned Asset Owners became the latest green coalition to change the language on its website to clarify that signatories make “individual” commitments in line with their “fiduciary obligations.” Other net zero groups have made similar adjustments to show that members aren’t coordinating CO2 reductions and that the ultimate goal is to protect asset values. Their members include BlackRock Inc., Citigroup Inc. and JPMorgan Chase & Co.

Such rephrasings mark a departure from earlier statements that referred to joint industry efforts to reduce emissions to fight climate change. Though seemingly innocuous, the adjustments followa wave of threats from the GOP, with Republican lawmakers, governors and state attorneys general alleging that climate alliances represent a form of collusion that warrants antitrust lawsuits. In New Hampshire, GOP lawmakers have gone so far as toseek to criminalize ESG investing.

Climate alliances are now “acting to reduce perceived risk under US antitrust law because of the politically polarized environment,” said Maurits Dolmans, a senior counsel at Cleary Gottlieb Steen & Hamilton. 

And with elections ahead, the political context “will only become more toxic,” he said.

The drumbeat against environmental, social and governance investing strategies has reached fever pitch, with GOP lawmakers in New Hampshire now seeking up to 20 years imprisonment for those who “knowingly” incorporate ESG in investments. 

GOP threats have already resulted in a mass exodus from a net zero alliance for insurers. And insurance