Donald Trump’s imminent return to the White House is already impacting climate-related decisions taken by leading finance firms.
Increasing hostility towards net-zero policies in the US has now forced the Net Zero Asset Managers initiative to suspend its activities after Wall Street companies, such as Black Rock, JPMorgan Chase, Goldman Sachs and Citigroup, sought to distance themselves from climate-related organisations.
The Net Zero Asset Managers initiative exists to help investors mitigate the material financial risks of climate change and to realise the enormous benefits of the economic transition to net zero.
However, they say, “Recent developments in the US and different regulatory and client expectations in investors’ respective jurisdictions have led to NZAM launching a review of the initiative to ensure NZAM remains fit for purpose in the new global context. Signatories will be consulted throughout the review process and informed of any updates in a timely and transparent fashion.”
While the review takes place NZAM has suspending activities to track signatory implementation and reporting.
NZAM has also removed the commitment statement and list of NZAM signatories from its website, as well as their targets and related case studies, pending the outcome of the review.
Until this month, the voluntary initiative had successfully supported investors globally as they sought to navigate their own individual paths in the energy transition in line with their fiduciary duties and clients’ long-term financial objectives.
However, concern about regulatory shifts in the US is adding pressure to companies already feeling battered by anti-climate activists.
The Times has reported that banks, insurers and asset managers have been facing criticism and litigation for their net-zero strategies. Republicans have claimed that strategies pursued by companies to cut greenhouse gas emissions are ‘woke’ and anti-competitive.
The Times reported that “In November, a group of Republican-led US states sued BlackRock and fellow American asset managers Vanguard and State Street over allegations they had broken antitrust laws by using their shareholdings in coal companies to pressure them to cut production of the fossil fuel.”
The newspaper writes, “BlackRock, which is based in New York and oversees $11.5 trillion of assets, said it was leaving NZAM because its membership of such organisations had “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials”.”