CA100+ grapples with new exits ahead of US elections
The stewardship coalition Climate Action 100+ faces new manager exits amid ongoing Republican pressures ahead of the US elections
Nuveen has become the latest manager to exit the global stewardship coalition Climate Action 100+, the group confirmed. The $1.1 trillion manager whose parent company is TIAA (The Teachers Insurance and Annuity Association), is a major investor in renewable energy, farmland, and timberland.
A spokesperson for the manager confirmed to Net Zero Investor that “after careful consideration and as a result of an ongoing rigorous governance review process, Nuveen has ended its membership with Climate Action 100+.”
“We are fully committed to responsible stewardship, engagement on climate-related issues with investee companies, mitigating risk across asset classes, and helping our clients meet their climate-related investment goals.”
The manager did not clarify why it has left the stewardship coalition, but its departure is the latest in a series of exits, including those by Goldman Sachs Asset Management, and earlier this year, Vanguard and State Street.
Polarisation ahead of elections
This comes as the US House Judiciary Committee, currently led by Republican Chairman Jim Jordan, announced on 30 July that it had sent letters to 130 financial organisations, including Nuveen and Goldman Sachs Asset Management, describing their membership of CA100+ as involvement in a “woke ESG cartel.”
The letter targeted prominent US investment managers as well as some of the largest asset owners in the US, including CalPERS, CalSTRS, and the New York State and City Retirement Systems. However, it has also received pushback from asset owners, with a coalition of asset owners collectively managing £5.5 trillion signing a public letter earlier in July reaffirming their commitment and stressing the importance of acting collectively to exercise effective stewardship.
In response to the news of Nuveen’s departure, CalPERS, whose Chief Operating Investment Officer Michael Cohen acts as chair of the Climate Action 100+ steering committee, reiterated its continued commitment to the platform.
A spokesperson for Climate Action 100+ confirmed that Nuveen and Goldman Sachs Asset Management had left the stewardship coalition but said that the ongoing politicisation of the initiative was “regrettable.” “Climate Action 100+ will continue to support investors globally as they act on climate-related financial risks and opportunities. We welcome Goldman Sachs’ continuing commitment to maintain its sustainable investing work through its global capabilities and look forward to seeing the ongoing impact of this,” the spokesperson said.
Political Limbo
Political pressures from conservative politicians appear to have increased ahead of the US elections, amid concerns that the Republicans could lose their majority in the US House Committee on the Judiciary, which is tasked with overseeing the administration of justice within federal courts.
Current chair of the House Judiciary Committee, Republican Jim Jordan, has been a vocal opponent of ESG investing. However, if Democrats were to win the upcoming elections in November, the majority party of the committee would also change. His political opponent, Democrat Jerry Nadler, has in the past backed climate initiatives such as the Green New Deal.
With elections in the US looming, investors across the political spectrum are facing a new limbo.
While many pension funds are keen to avoid political pressures associated with climate stewardship, even funds in red states are now considering climate risks as part of their fiduciary duty and continue to allocate capital to the energy transition.
Despite stewardship coalitions facing increased political pressures, institutional capital allocations tell a very different tale. Last year, the Florida State Board of Administration, which manages the assets of, among others, the Florida Retirement System, announced a $200 million investment in a clean energy fund, despite Florida Governor Ron DeSantis being one of the most vocal critics of ESG investments.
Similarly, Nuveen, despite leaving the stewardship coalition, also confirmed an additional £1.1 billion Significant Risk Transfer (SRT) investment as part of its energy transition credit strategy, indicating that the manager has no intention of abandoning climate investing.
Climate wars: how US pension funds are dealing with the political divide
