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Tenn. AG Probes Asset Managers Over Climate Change

Monday, 05 June 2023 08:42 AM EDT

Tennessee's top legal officer has demanded ten major asset managers provide information over how they seek to tackle climate change, as part of an investigation into potential breaches of consumer law.

The state's Republican attorney general Jonathan Skrmetti sent his requests on May 19 in letters to firms that include AllianceBernstein, Invesco Ltd and the Jennison Associates arm of Prudential Financial Inc, according to copies provided to Reuters in response to a public records request.

While similar investigations by Republican officials have not led to charges, the letters mark an escalation in attacks on so-called environmental, social and governance (ESG) investing practices.

Skrmetti and 20 other Republican state attorneys general wrote to asset managers in March suggesting they are breaching their fiduciary duties in their handling of environmental or social issues.

Some of the other signers of that letter have also sent asset managers separate information demands about climate polices, such as an April 24 letter from Louisiana Attorney General Jeff Landry to Franklin Templeton.

Shareholder activists and others who support the consideration of ESG factors say the campaign will not likely find wrongdoing or diminish investors' concern for issues like climate change or full workforce inclusion.

But some argue that it could have a chilling effect on ESG conversations, and say the state actions may have already made companies less willing to talk about such issues.

"You have seen companies and asset managers being less visible about their sustainability profile," said Bryan McGannon, managing director for sustainable investment group US SIF.

Skrmetti's letters state he is investigating potential "unfair or deceptive acts or practices" that would arise from breaches of Tennessee's 1977 consumer protection law. They did not provide more details on what these breaches would involve.

In statement, Skrmetti's office said he is "highly concerned with corporate collusion," but did not detail specific potential violations.

Representatives for Invesco and Jennison declined to comment. AllianceBerstein did not respond to requests for comment. Representatives for Franklin Resources, which operates as Franklin Templeton, did not immediately comment on Friday.

Skrmetti's letters ask the asset managers to produce all documents, including notes and memos, related to their work with climate coalitions aiming to help reduce greenhouse gases, such as Climate Action 100+ or the Net Zero Asset Managers initiative.

The letters also ask for information on how asset managers exercise their rights as shareholders to pressure banks or energy producers to cut carbon emissions.

K&L Gates attorney Lance Dial, whose firm's clients include asset managers that received letters from Skrmetti or similar ones from other state attorneys general, said the probes were unlikely to uncover collusion.

Participation in the industry climate groups, Dial said, "is taken in furtherance of their fiduciary duty, and they maintain their independence."

© 2024 Thomson/Reuters. All rights reserved.


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Tennessee's top legal officer has demanded ten major asset managers provide information over how they seek to tackle climate change, as part of an investigation into potential breaches of consumer law.
tennessee, ag, probe, climate, change
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2023-42-05
Monday, 05 June 2023 08:42 AM
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