Some of the biggest banks and wealthiest investment firms are abandoning earlier commitments to engage in climate-friendly investing as Congress cracks down on socially conscious investing and Donald Trump prepares for his return to office.
The Guardian reported that JP Morgan announced earlier this week that it’s leaving a U.N.-sponsored initiative called the Net Zero Banking Alliance. Basically, the group represented a commitment to prioritize investments that help countries reach “net zero” emissions (the point at which the amount of greenhouse gases being released into the atmosphere is equal to the amount being removed from the atmosphere).
JP Morgan’s announcement means that the U.S.’s six biggest banks have now all reneged on their commitments — and all of them waited until December to do so. Needless to say, with climate crises mounting — raging fires on the West Coast; more frequent, potentially deadly cold spells; and intensifying hurricanes — it’s ominous to see companies retreating from these organizations in the fight against climate change.
In addition, the investment firm BlackRock, which manages around $11.5 trillion in assets and is reportedly the world’s largest asset manager, announced this week it is leaving a similar initiative known as the Net Zero Asset Managers Initiative. Reuters reported that it had reviewed a client letter about the change (which has not been verified by MSNBC or NBC News), in which the firm says “our memberships in some of these organizations have caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials.” That may be a reference to the probes that House Republicans have launched last year, alleging that companies engaged in climate-conscious investing might be guilty of illegal “collusion” of some sort. BlackRock suggested at the same time that leaving the initiative is not a change in strategy and that its money managers “continue to assess material climate-related risks.” (Despite its leaving the U.N. group for banks, JP Morgan told Reuters that it was still a member of the asset managers initiative.)
All of this corporate cowardice is happening as the Republican Party wages war on socially conscious investing, also known as “environmental, social and governance” (ESG) investing. Conservatives are working to deter companies from considering moral and ethical practices when they pick where to park their money. Republicans have fought such programs at the federal and state levels. Now, they have a sympathetic ear in the incoming Trump administration. Trump, as I’ve reportedly, has mocked the idea of “net zero” emissions while admitting he doesn’t even know what it means.
And rather than face off against MAGA on this point, corporate America is doing what capitalism always does: abandon principles in pursuit of profit and power.
Ja’han Jones is an MS NOW opinion blogger. He previously wrote The ReidOut Blog.