US lawmaker report finds Wall Street 'colluded' to curb emissions

STORY: A U.S. Congressional committee is accusing the biggest Wall Street firms of colluding with advocacy groups to force companies to shrink their greenhouse gas emissions.

That’s according to a first of its kind report from the House Judiciary Committee led by Republican Jim Jordan.

It claims financial firms, responding to investors concerned about climate change, have worked together to cut investments in fossil fuels.

Reuters reporter Isla Binnie got an exclusive look at the report ahead of its publication.

“Some of the the groups that are are targeted in the report by the Republican LED committee today, they they detect a political campaign that they see as being aimed against climate action or action against climate change. And they think that there is an attempt to stop investors considering these kinds of climate related financial risks overall, if they can.”

The investigation, which launched in 2022, is looking into whether corporate efforts to tackle climate change violated antitrust laws.

And the report criticized the world's three biggest asset managers, BlackRock, Vanguard and State Street, as members of the "climate cartel.

Rising public awareness about climate change has put pressure on firms to show they are taking steps to curb planet-warming carbon emissions. But climate change skeptics, who deny the overwhelming scientific consensus, have pushed back.

“So environmental, social and governance or ESG investing has become increasingly politically sensitive over the last couple of years, particularly in the United States, there is a clear partisan divide. Most of this has occurred at the state level with traditional Republican or so-called red state officials working to limit some of the contracts that are available for state work from Wall Street firms, some of the most high profile and some leaders on Wall Street have even gone so far as to stop using the term ESG because it's so politicized. Now, at the federal level, the Republican LED Judiciary Committee has started this probe.”

Many of these states have worried that the environmental initiatives will harm jobs in the fossil fuel industry.

The report accuses President Joe Biden’s administration of failing to "meaningfully investigate the climate cartel's collusion, let alone bring enforcement actions against its apparent violations of longstanding U.S. antitrust law."

A White House spokesperson did not immediately respond to a request for comment.

Representatives for BlackRock, State Street and Vanguard did not immediately respond to requests for comment, though others targeted have indicated they think politics is playing a central role here.

The House Judiciary Committee is holding a hearing on the report Wednesday.