Climate Action 100+ Hit by Major Asset Managers' Exit, Exxon Mobil's Legal Action Looms
Climate Action 100+, a significant investor-led initiative, has faced a setback with the departure of two major asset managers, State Street and JP Morgan, along with BlackRock's reduced involvement. This move, not entirely unexpected, comes amidst Exxon Mobil's legal action against shareholder activists and questions about asset owners' influence on climate transition planning.
Gustave Loriot-Boserup, Compass Insights' founder, described these exits as unsurprising, given the asset managers' voting history against CA100+ proposals. ShareAction's research revealed that some members repeatedly voted against key resolutions flagged by the alliance. Despite this, Keith Guthrie from Cardano and Now: Pensions stressed the importance of value alignment when selecting asset managers for stewardship.
Loriot-Boserup predicts increased demand for split voting solutions, encouraging investors to use their powers and adjust positions in individual companies. The exits, totaling over $14 trillion in assets, excluded the three largest index fund providers from the alliance. However, Sam Mahtani from Alpha ESG Consulting argues that the impact should not be overstated, as CA100+ still has a substantial committed signatory base.
The departures followed Exxon Mobil's lawsuit against shareholder activists, potentially discouraging asset owners from backing climate resolutions. Cynthia Hanawalt from the Sabin Center for Climate Change Law warns that this lawsuit threatens shareholder rights. Notably, no activist resolution will be filed at the Exxon AGM this year, raising concerns about asset owners' influence over climate transition planning at oil and gas firms. The main shareholders actively involved in JP Morgan and State Street's stocks, including The Vanguard Group and BlackRock, are known for advocating ESG criteria, with BlackRock's CEO Larry Fink emphasizing corporate responsibility on climate issues.
The exits of State Street, JP Morgan, and BlackRock's reduced involvement in CA100+ have significant implications. While the alliance remains substantial, these changes may impact its influence on climate transition planning. The lawsuit against shareholder activists by Exxon Mobil further complicates the situation, potentially discouraging asset owners from supporting climate resolutions. The future of CA100+ and its impact on climate action depends on how these challenges are addressed.
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