Louisiana Attorney General Jeff Landry has ordered an investigation into a major investor-led coalition that aims to fight climate change through the financial sector.
Landry’s office on Tuesday announced a “multi-pronged” effort focusing on the Climate Action 100+ Steering Committee, specifically scrutinizing Franklin Templeton and the California Public Employees’ Retirement System. The investigation will look into whether the groups breached their obligations to investors by prioritizing climate initiatives. The move is yet another foray by the GOP against the environmental, social, and governance movement, or ESG.
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“ESG investing puts politics over people and raises significant concerns that companies guided by these green-energy fantasies may be engaging in unfair and deceptive practices that harm Louisiana consumers,” Landry said, according to the Washington Times. “Franklin Templeton is deeply embedded in Climate Action 100+; and we are troubled that, by focusing on the radical ESG agenda, it may be violating its fiduciary duties to shareholders in our state.”
Climate Action 100+ bills itself as “an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.” It uses a benchmark to measure corporate progress on ESG criteria and achieving net-zero emissions by 2050 or sooner.
Franklin Templeton has some $1.5 trillion in assets under management, while CalPERS, the country’s largest public pension fund, had more than $440 billion in assets under management as of last year.
Last year, congressional Republicans, led by Rep. Jim Jordan (R-OH), sent a letter sent to executives of the steering committee for Climate Action 100+ demanding documents that show the group’s network of influence. In the letter, they said the coalition “seems to work like a cartel to ‘ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.’”
The Washington Examiner asked Climate Acton 100+, CalPERS, and Franklin Templeton for comment but didn’t immediately receive responses.
Landry’s investigation is yet another broadside against ESG, which proponents view as a way for finance and business to cause social change, for example, by mitigating climate change. Critics, though, view it as an attempt to distort the free market and the culture of the country through capital and influence.
Last week, Rep. Andy Barr (R-KY) introduced legislation that would prevent big banks from refusing or limiting financial services to certain businesses, such as those in the fossil fuel industry.
The bill would mandate banks with over $100 billion in total consolidated assets to provide fair access to banking services, capital, and credit to industries. The goal is to prevent banks from choking off financial services to politically divisive companies such as gun manufacturers and oil and gas companies.
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ESG has been an increasingly salient political issue, not only among state attorneys general and state treasurers but on the national stage.
Biden was forced to make the first veto of his presidency this year after Congress passed a resolution to cancel a Labor Department rule that allows retirement plan managers to weigh ESG factors when making investments. Centrist Sens. Joe Manchin (D-WV) and Jon Tester (D-MT) joined with Republicans on the issue in the narrowly divided Senate.
