Dive Brief:
- Northern Trust Asset Management has departed investor group Climate Action 100+ and the United Nations-backed Net-Zero Asset Managers initiative, the financial services company confirmed to ESG Dive Friday.
- “This decision [to withdraw] reflects our confidence that we can independently and effectively manage material risks and engage with portfolio companies to safeguard and grow our clients' capital,” a Northern Trust spokesperson said in an emailed statement. “We have made and continue to make investments that support our independent stewardship and sustainable investing capabilities.”
- The firm’s decision to leave both groups comes against a broader backdrop of Wall Street exits from climate-focused memberships that have coincided with the changes in the federal government leadership and increased Republican-led scrutiny of such groups.
Dive Insight:
Chicago-based Northern Trust, which manages around $1.6 trillion in assets, announced its departures the same week President Donald Trump returned to the White House for his second term. Trump cemented his first day in office with a flurry of executive orders that signaled reversal on the nation’s federal climate policy, including an order to withdraw the U.S. from the Paris Agreement, again; declare a national “energy emergency;” and pause on all wind power development.
The financial institution’s withdrawal also follows a wave of major U.S. banks announcing departures from climate alliances. Several notable banks have withdrawn memberships from groups that advocate for net-zero status or climate-focused goals in the past few weeks alone.
Bank of America and Citi announced they were leaving the United Nations-backed Net-Zero Banking Alliance on New Year’s Eve, followed shortly by Morgan Stanley and JPMorgan Chase on Jan. 2 and Jan. 7, respectively. The slew of departures came less than a month after Goldman Sachs and Wells Fargo ended their memberships in the group.
The exodus also spurred the Net-Zero Asset Managers initiative — also a UN-backed group — to suspend all activities to track its signatories’ reporting and implement their commitments, as it undergoes a review of the program. NZAM announced the Jan. 13 operational pause just days after BlackRock, the world’s largest asset manager by AUM, pulled out of the initiative.
Separately, CA100+ has recently gone through a rocky time as well. Several big names left the group last year as House Republicans continued an inquiry into members’ use of environmental, social and governance factors in investment decisions.
JPMorgan Asset Management, State Street Global Advisors, Invesco, Pacific Investment Management Company, Goldman Sachs’ asset management arm and subsidiaries of Franklin Templeton and Sun Life Financial all left CA100+ last year. Meanwhile, BlackRock downgraded its membership to a smaller international arm.
A recent report from the House Judiciary Committee found that over 70 investors have left CA100+ in the years since Republicans on the committee have investigated the group. The December report said the investors attributed the departures to reasons that include “obligations under antitrust and competition laws.”
