The US House of Representatives Judiciary Committee has subpoenaed BlackRock and State Street for documents and communications related to its probe into whether environmental, social and governance (ESG) efforts violate antitrust laws.
The committee wrote to BlackRock and State Street on July 6, requesting documents. However, response from both the companies on the request has been inadequate, the committee said in a statement.
“Having already produced more than 7,700 documents and 91,000 pages, a subpoena was not necessary but we understand this is the Committee’s practice, and we will continue to cooperate,” BlackRock said.
State Street said in a statement, “We have cooperated fully with the committee and will continue to do so going forward. We remain confident that we have not violated any anti-trust laws.”
House Judiciary Chairman Jim Jordan had earlier also sent a subpoena to asset manager Vanguard.
The company is “committed to working constructively with lawmakers and has cooperated with the Committee’s requests, including producing tens of thousands of pages of relevant documents to date,” Vanguard said.
The panel is looking into allegations from critics of these investment firms that they colluded in committing to make the investments.
Accoding to the subponeas, the documents are due to the committee by 12 January 2024. There are press reports that subpoenas for Glass Lewis and Institutional Shareholder Services are being finalised soon. ,
The probe by the committee is the latest in a long Republican campaign against ESG investing, as multiple state governments have looked to penalise or divest from firms that consider ESG in their investment process.
In March, US President Joe Biden used his veto power for the first time to block a bill that would have stopped fund managers basing investment decisions on ESG factors.
Earlier in the year, Florida’s Senate approved a bill banning state and local governments from using ESG criteria when selling debt or investing public money in April 2023.
The state’s governor, Ron DeSantis formed an alliance with 18 other US states – Alabama, Alaska, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Oklahoma, South Dakota, Tennessee, Utah, West Virginia, Virginia and Wyoming – to pushback against the The Department of Labour’s new rule allowing climate-aligned funds in 401(k) retirement plans, passed in 2022.
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