U.S. finance CEOs challenged for leaving climate pacts by Democratic lawmakers

By Simon Jessop, Nupur Anand and Saeed Azhar

NEW YORK/LONDON (Reuters) - Democratic lawmakers harshly criticized the chief executives of BlackRock (NYSE:BLK), JPMorgan and other top finance companies for leaving several global coalitions devoted to combating climate change, urging them to uphold their previous commitments and policy targets designed to reduce greenhouse gas emissions. 

Against a backdrop of worsening extreme weather events and rising financial risks, the members of Congress said the bosses had "actively decided to cede leadership on combating climate change," a letter to the executives seen by Reuters showed. The letter, sent Thursday, also asks for records of their communications with the Trump administration regarding any plans to cut their work on environmental and social causes. 

"We are disappointed that your organization appears to be disregarding science and what’s good for business, and instead yielding to political pressure for short-term political favor," it said. 

The chief executives of Morgan Stanley, Citigroup (NYSE:C), Bank of America, Wells Fargo, Goldman Sachs, Northern Trust (NASDAQ:NTRS), Franklin Templeton, State Street (NYSE:STT), Invesco and Pimco, part of insurer Allianz (ETR:ALVG), also received the letter, which was led by California Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee and Illinois Rep. Sean Casten.

Pimco, Wells Fargo, Bank of America, Goldman Sachs, Citi, State Street and JPMorgan have declined to comment. Franklin Templeton was not immediately available while the other companies and banks did not immediately return a request for comment.

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Each institution left either the Net Zero Banking Alliance, the Net Zero Asset Managers Initiative or Climate Action 100+, members of which had either committed to cutting emissions linked to the institution’s activities or to engaging with investee companies over climate.

When they left the groups, most of the institutions said they still pledged to reduce emissions but made no reference to the political pressure from some Republican politicians, who accused the companies of unfairly seeking to limit financing to the fossil fuel industry.

Industry emissions from the burning of coal, gas and oil are the leading cause of man-made global warming and countries have agreed to try and reduce them, although the administration of President Donald Trump has recently pulled the U.S. out of the deal.

As well as asking the CEOs to explain their decision to leave the groups, the letter asked them to confirm their intention to achieve their previously stated emissions-reduction goals and explain how they intended to do it.

The letter also asked whether they would continue publishing their progress or explain why not; to detail existing targets and policies to cut emissions in line with the Paris Agreement on climate; and to commit not to weaken them.

For the banks specifically, it asked them whether they still intend to set targets and policies on so-called "facilitated" greenhouse gas emissions, such as those linked to companies issuing bonds a bank underwrites. The letter also asked whether the banks would stick with the same timetable for emission reduction goals.

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And for all the companies, it asked them to detail communications with the Trump administration regarding cutting environmental, social and governance activities since Jan. 20, including any directives to freeze funds for climate-related federal programmes such as the Greenhouse Gas Reduction Fund.

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