Attorneys general issue ‘anti-ESG’ demands to big six US banks
The banks have been ordered to disclose UN climate initiative membership details amid growing Republican attacks on ESG investing.
A coalition of 19 US states has served six major banks with “civil investigative demands”, calling for Net Zero Banking Alliance (NZBA) members to hand over details of their ESG practices and involvement with the UN-backed body.
Subpoenas have been served calling for the banks to disclose documents regarding pledges and commitments made to global climate initiatives and to outline how NZBA objectives have been embedded in their strategies.
Missouri, Arizona, Kentucky and Texas are leading states in the investigation, launched in the wake of concerns that business and investment decisions are being steered by the UN.
The banks under investigation are: Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo.
Missouri Attorney General Eric Schmitt said: “The Net-Zero Banking Alliance is a massive worldwide agreement by major banking institutions, overseen by the UN, to starve companies engaged in fossil fuel-related activities of credit on national and international markets. Missouri farmers, oil leasing companies, and other businesses that are vital to Missouri’s and America’s economy will be unable to get a loan because of this alliance.”
“We are leading a coalition investigating banks for ceding authority to the UN, which will only result in the killing of American companies that don’t subscribe to the woke, climate agenda. These banks are accountable to American laws – we don’t let international bodies set the standards for our businesses,” he added.
The Net-Zero Banking Alliance is a massive worldwide agreement by major banking institutions, overseen by the UN, to starve companies engaged in fossil fuel-related activities of credit on national and international markets.
Detailed demands
The demands include forcing the banks to identify every division and leader who has work involving ESG integration and outline each climate initiative the bank is a signatory of and explain the reasons for opting to join.
Banks must also disclose their NZBA Steering Group delegate, including meeting times and locations, and describe the extent to which the bank has incorporated the Principles for Responsible Banking into its operations.
Membership of other initiatives is set to come under similar scrutiny, with membership details of the Glasgow Financial Alliance for Net Zero Principals Group also falling under the subpoenas from the attorneys general.
The coalition seeks to establish how the banks have acted to meet the NZBA objective of facilitating the “necessary transition in the real economy through prioritising client engagement and offering products and services to support clients’ transition,” arguing the banks did not reflect the views of customers.
The move to target signatories of the UN-backed initiative follows similar efforts against other parts of the net-zero investment sector. Over the past 12 months, banks and public pension funds have been the target of proposed anti-ESG regulation.
Anti-ESG bills
A total of 18 states have proposed legislation restricting the capacity of retirement plans to boycott certain industries, such as fossil fuels. The proposed regulations have been described as “anti-ESG bills”.
Earlier in October, four Republican representatives launched a bill to counter proposed amendments to the Employee Retirement Income Security Act (ERISA) that would allow pension fiduciaries to explicitly consider ESG factors.
North Carolina representative Greg Murphy said: "The Biden administration's proposed changes to ERISA abandon fiduciary responsibility by allowing 'woke' ESG factors to dictate investment returns — putting Americans' retirement savings at risk.
"Our commonsense legislation would impose strict enforcement measures to ensure that 'woke' Biden policies do not hinder Americans' retirement savings,” he added.
In July, the Missouri Attorney General sent civil investigative demands to Morningstar and Sustainalytics, both containing 43 interrogatories for documents relating to Morningstar’s perceived anti-Israel bias in ESG rating products like Sustainalytics’ “Human Rights Radar”.
