The House Judiciary Committee, led by Republicans, has issued subpoenas to BlackRock and State Street as part of an ongoing investigation into the firms’ promotion of environmental, social, and governance (ESG) goals. The committee had initially requested company documents on the matter but found their compliance to be inadequate, which prompted the issuance of subpoenas.
ESG investing, also known as sustainable investing or impact investing, focuses on goals such as achieving net-zero greenhouse gas emissions. However, Republicans on the committee are concerned that these goals may hinder asset managers from acting in the best interests of their clients and potentially harm the U.S. economy.
BlackRock, the world’s largest asset manager, has emphasized its commitment to acting independently and helping its clients achieve their financial goals as a fiduciary. The company has cooperated with the committee, providing thousands of documents and pages of information. A spokesperson for BlackRock stated that they understand the committee’s practice of issuing subpoenas and will continue to cooperate.
Similarly, State Street expressed confidence that they have not violated any antitrust laws and stated their commitment to working constructively with lawmakers. The company has pledged full cooperation with the committee’s investigation.
Larry Fink, CEO of BlackRock, has distanced himself from discussing ESG investing, citing its politicization by both the left and right. He has emphasized that the company diversifies its investments by balancing traditional energy sources with renewable energy.
In addition to BlackRock and State Street, the committee previously issued a subpoena to asset manager Vanguard as part of its investigation. Vanguard has cooperated with the committee’s requests, providing tens of thousands of relevant documents.
The investigation, led by Republican Chairman Jim Jordan, aims to examine how companies like BlackRock and State Street advocate for ESG investing and whether such practices violate antitrust laws.
The House Judiciary Committee’s subpoenas reflect a growing scrutiny of ESG investing and its potential implications for the financial industry. Critics argue that ESG goals may override fiduciary responsibilities and negatively impact the economy. The ongoing investigation will shed light on the extent of these concerns and their potential consequences.
Stay informed with the top business stories, CEO interviews, market updates, and tech and money news that matter to you. Subscribe to receive content and promotional communications from Fox Business, and remember that you can opt-out at any time.
