The House Judiciary Committee sent subpoenas to BlackRock and State Street as part of an ongoing investigation of the firms’ promotion of environmental, social and governance (ESG) goals. The initial letters were sent to the companies on July 6, requesting documents on the subject, but the panel deemed the compliance “inadequate,” prompting the issuance of subpoenas.
The Republican-led Judiciary Committee is looking into how companies like BlackRock and State Street advocate for ESG investing, questioning whether it violates antitrust laws. The concern is that ESG goals like achieving net-zero greenhouse gas emissions could lead asset managers to prioritize those goals over the best fiduciary interests of their clients, potentially harming the U.S. economy.
In response, BlackRock emphasized its commitment to acting independently to help clients achieve their financial goals. The company stated that it has already produced over 7,700 documents and 91,000 pages in response to the committee’s inquiries and will continue to cooperate with the investigation.
CEO Larry Fink has expressed his reluctance to discuss ESG investing, stating that it has been “weaponized by left and right” and emphasizing that BlackRock balances investments in both traditional and renewable energy sources.
State Street also asserted its confidence in not violating any antitrust laws and stated that it has cooperated fully with the committee’s requests.
This announcement comes after the House Judiciary Committee Chairman, Jim Jordan, had previously sent a subpoena to asset manager Vanguard amid its own investigation. Vanguard expressed its commitment to working constructively with lawmakers and cooperating with the committee’s requests.
While the investigation into ESG investing continues, the impact and implications for the financial industry remain to be seen.
(This report includes information from Reuters.)