21 Republican state Attorneys General have written an open letter to more than 50 of the U.S.’s largest asset managers with a warning that using client assets to align profiles with ESG and net-zero goals may violate antitrust laws.
The March 30 letter led by Austin Knudsen, Jeff Landry, and Sean Reyes, the Attorneys General for Montana, Louisiana, and Utah, respectively, lays out concerns by the state officials that asset managers are disregarding their legal duties by committing to take actions which they argue are inconsistent with their clients’ financial interests.
The officials raise direct concerns with the asset managers’ participation in the Net Zero Asset Managers Initiative (NZAM) and Climate Action 100+, stating “given that many of you have committed ’all assets under management’ to certain environmental goals, your failure to label or advertise all your funds as ESG funds suggests a breach of your duties of care and loyalty.”
The letter also addresses funds that are labelled as ESG funds claiming that asset managers “have not adequately explained to investors the downsides and risks,” and that “many of your environmental assumptions appear to be dubious.”
The letter concludes that the Attorneys General will continue to evaluate activity in this area “in line with our ongoing investigations into potential unlawful coordination and other violations that may stem from the commitments you and others have made as part of Climate Action 100+, NZAM, or the like.”
German insurance firm Munich Re has recently announced its decision to discontinue its membership in the Net-Zero Insurance Alliance (NZIA) citing antitrust risks.