Banking Giant JP Morgan Exits Climate Action Group

By Irina Slav – Feb 15, 2024, 9:00 AM CST

JP Morgan Asset Management leaves Climate Action 100+ to focus on its internal sustainable investing team.
Climate Action 100+ notes only 13 members have exited since inception while welcoming 60 new members since mid-2023.
Conservative state opposition to ESG investing may be a contributing factor to exits from climate pressure groups in the financial industry.

JP Morgan Asset Management has left the Climate Action 100+ group that was set up to pressure companies into becoming greener.

The reason for the move, per the Financial Times, is that the bank’s asset management arm believes it has accumulated the expertise to push companies into climate action on its own.

“The firm has built a team of 40 dedicated sustainable investing professionals,” a spokeswoman for JP Morgan Asset Management told the FT. “Given these strengths and the evolution of its own stewardship capabilities, JPMAM has determined that it will no longer participate in Climate Action 100+ engagements.”

Climate Action 100+ was set up in 2017 with the purpose of forcing heavy emitter companies into cutting their carbon footprint. The group’s targets included oil and gas, the air travel industry and other energy-intensive industries.

In response to JPMAM’s exit, Climate Action 100+ said only 13 members have ended their membership in the group since its establishment while new members since mid-2023 stood at 60.

JP Morgan Asset Management is not the first member to leave the group. Last year saw the exit of several smaller investment firms such as Boston-based, Natixis-owned Loomis Sayles and BNY Mellon-owned Walter Scott.

Current members include BlackRock, Goldman Sachs, and Invesco, while Vanguard and Fidelity never joined the group, the FT recalls.

The past couple of years also saw several high-profile exits from anther net-zero formation in the financial services world. Vanguard surprised the industry when it abruptly left the Net Zero Asset Managers group saying it wanted more independence and clarity for its investors.

There have been lower-profile exits from climate pressure groups in the industry, too. One reason that analysts cite for this is conservative state governments’ push against so-called ESG investing, which many have argued is discriminatory. Some states, notably Texas, threatened to pull out their investments from asset managers that supported the ESG investing movement.

By Irina Slav for Oilprice.com