Net Zero Asset Managers (NZAM) Initiative Under Scrutiny: Key Takeaways from the House Judiciary Investigation into ESG and Antitrust
AUTHORS: CARLI SCHOENLEBER, SENIOR COMMUNICATIONS MANAGER, CONTENT AND ENGAGEMENT SPECIALIST; VANESSA VLASAK, ASSOCIATE ESG MANAGER
FEBRUARY 28, 2025Highlights
The House Judiciary Committee’s intensified investigation into climate coalitions like NZAM underscores the importance of aligning climate goals with fiduciary duties and documenting their business rationale.
In response to the investigation, major asset managers, including BlackRock, Vanguard, and JPMorgan, have exited coalitions like NZAM and Climate Action 100+ while maintaining robust climate risk strategies.
A cohesive narrative about your sustainability strategy, reinforced through consistent messaging across investor reports, marketing materials, and public statements, fosters trust and demonstrates to stakeholders that sustainability is integral to your business objectives.
Introduction
For more than two years, the House Judiciary Committee, led by Chairman Jim Jordan, has been investigating climate-focused investor coalitions, expanding its inquiry in December 2024 to over 60 asset managers involved in the Net Zero Asset Managers (NZAM) initiative.[1]
The committee’s request for information focused on how firms’ membership in NZAM and the Glasgow Financial Alliance for Net Zero (GFANZ) influenced voting policies, shareholder engagements, and investment strategies, with the committee raising concerns about coordinated efforts to “impose a ‘net-zero’ climate agenda on U.S. companies” and potential violations of U.S. antitrust law.[2]
In response to heightened scrutiny, some major firms, including BlackRock, Vanguard, and JPMorgan, have withdrawn from alliances like NZAM and Climate Action 100+ while maintaining independent climate risk strategies.[3] Meanwhile, other financial institutions continue to defend collective engagement on climate risks as essential to long-term risk management and financial performance.[4]
This article will discuss the key developments in the House Judiciary Committee investigation, how major firms have responded, and implications for corporate sustainability strategies.
Key Developments in Investigation
December 2022
The House Judiciary Committee announced an investigation into ESG coalitions and whether they amount to anti-competitive collusion and violation of U.S. antitrust laws, requesting documentation from Climate Action 100+ on how they advance their ESG goals.[5]
June–December 2023
The House Judiciary Committee expanded its investigation, issuing subpoenas to multiple organizations, including Ceres, GFANZ, As You Sow, ISS, Glass Lewis, Vanguard, Arjuna Capital, BlackRock, and State Street. The committee sought documents related to their climate and ESG initiatives, alleging potential antitrust violations and economic harm from coordinated efforts to promote net-zero commitments.[6] [7] [8] [9] [10]
February 2024
House Oversight Committee Chairman James Comer sent a letter to the general counsel of the Federal Reserve requesting a review of whether asset managers’ ESG commitments, including those made through coalitions like NZAM, Climate Action 100+, and the Principles for Responsible Investment, violate federal banking laws such as the Bank Holding Company Act, the Home Owners Loan Act, and the Change in Bank Control Act.[11] [12]
June 11, 2024
The House Judiciary Committee released an interim report titled "Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing." The report summarized the investigation thus far, alleging that environmental activists and financial institutions colluded to force American companies to decarbonize toward net zero. The report argued that these actions harmed industries like fossil fuels, aviation, and agriculture by driving up costs and limiting consumer options, ultimately violating U.S. antitrust laws.
The report centered on Climate Action 100+, CalPERS, Ceres, and Arjuna Capital, but discussed the committee’s larger antitrust investigation into an alleged “climate cartel,” composed of investor coalitions (e.g., Climate Action 100+), pension funds (e.g., CalPERS), environmental non-profits (e.g., Ceres), stockholder engagement service providers (e.g., As You Sow), activist investors (e.g., Arjuna Capital), asset managers (e.g., BlackRock), and proxy advisors (e.g., ISS).[13]
On the same day the “Climate Control” report was released, Democrats on the House Judiciary Committee published a staff report titled “Unsustainable and Unoriginal: How the Republicans Borrowed a Bogus Antitrust Theory to Protect Big Oil.” This report critiqued Chairman Jordan’s investigation, challenging the underlying legal framework. It argued that “no theory of antitrust law prevents private investors from collaborating to address the risks associated with climate change” and “[by] encouraging companies to provide investors with more information about material risks from climate change, ESG initiatives promote competition.”[14]
December 13, 2024
The House Judiciary Committee released an interim report titled "Sustainability Shakedown: How a Climate Cartel of Money Managers Colluded to Take Over the Board of America's Largest Energy Company," which focused on ExxonMobil as a case study. The report alleged that the “climate cartel” orchestrated campaigns to pressure ExxonMobil into adopting decarbonization goals, including replacing its board members with "climate cartel-aligned members.”[15]
December 20, 2024
House Judiciary Committee Chairman Jim Jordan requested information from over 60 asset managers that are members of NZAM, focusing on antitrust compliance.[2]
Responses from Asset Managers and Coalitions
In response to scrutiny, many asset managers have exited climate coalitions over the past two years but continue to integrate robust climate risk strategies into their investment approaches.
NZAM
Some major asset managers, including BlackRock and Vanguard, left the initiative in response to the federal investigation:
BlackRock withdrew from NZAM on January 9, 2025, citing confusion caused by its membership and legal inquiries. In a client letter, BlackRock clarified that the departure "does not change the way we develop products and solutions for clients or how we manage their portfolios," with portfolio managers continuing to assess material climate-related risks.[16] BlackRock’s January 2025 proxy guidelines underscore climate risks as a "mega force reshaping markets," advocating for TCFD- and ISSB-aligned disclosures and emphasizing the role of boards in overseeing climate risk management to deliver long-term financial returns.[17]
Vanguard exited NZAM on December 7, 2022 (one day after the Judiciary Committee investigation began) citing concerns about independence,[18] a rationale echoed by some insurers that left a related coalition.[19] Despite this, Vanguard highlights their commitment to addressing material climate risks that could impact long-term investor returns and engages with company boards to assess how they oversee, disclose, and mitigate material climate risks.[20]
NZAM Response: Shortly after BlackRock’s departure on January 9, NZAM responded with a statement, reiterating their mission to address climate risks as financial risks and highlighting their success in supporting investors in navigating the energy transition in line with their fiduciary duties.[21]
NZAM announced a temporary pause on January 13 to reevaluate whether the initiative “remains fit for purpose in the new global context.” During this review period, NZAM has suspended all activities related to tracking signatory implementation and reporting. Additionally, it has removed the commitment statement, signatory list, targets, and case studies from its website.[22] Just before BlackRock’s departure, NZAM listed 325 signatories on its website, managing $57.5 trillion in assets under management.[23]
State Street and other NZAM members expressed support for the announced review, however, many members are still discussing internally and have not issued a public comment:
State Street: "…will carefully evaluate its findings upon completion."
Allianz: “We think the initiative needs to carefully consider the changing landscape and find a means to develop a narrative that pushes forward the need for the market to develop a net zero pathway while remaining realistic that the timing might shift.”[24]
Climate Action 100+
State Street and JPMorgan withdrew from Climate Action 100+ in early 2024.[19]
JPMorgan explained that its decision reflected the development of its own investment stewardship capabilities.[19] JPMorgan’s 2024 proxy guidelines highlight the importance of transparency in emissions targets and net-zero plans, holding companies accountable through shareholder resolutions or director elections when climate disclosures are inadequate.[25]
State Street voiced concerns that Climate Action 100+ priorities, such as engaging policymakers, undermined its ability to act independently.[19]
Climate Action 100+ Response: Climate Action 100+ defended its actions in a statement released on June 12, 2024. The statement emphasized that its members act independently to address climate risks and prioritize long-term returns, stating that their actions are not collusion but rather responsible stewardship.[26]
Net Zero Banking Alliance (NZBA)
JPMorgan left NZBA in 2024, joining Citi, Bank of America, Morgan Stanley, Goldman Sachs, and Wells Fargo. The firm stated:
"We will continue to work independently to advance the interests of our Firm, our shareholders, and our clients while focusing on pragmatic solutions to help further low-carbon technologies while advancing energy security. We will also continue to support the banking and investment needs of our clients who are engaged in energy transition and in decarbonizing different sectors of the economy."[27]
NZBA Response: NZBA has not issued an official response. Their commitment statement and membership information remain active on their website, listing a current total of 136 banks committed, managing over $57 trillion AUM.[28] A previous article from NZBA indicates membership stood at 144 banks in October 2024.[29]
In Defense of Climate Coalitions
Despite these departures, many investors remain committed to climate coalitions, emphasizing the value of collective action to address systemic risks like climate change:
Climate Action 100+: In July 2024, over 60 asset managers reaffirmed their support of the initiative, expressing concern about the economic implications of climate change.[4]
NZAM: Following BlackRock’s departure from NZAM, several members commented in support of the initiative:
Ninety One: “…recognizes the role the initiative plays in helping investors mitigate the financial risks of climate change while unlocking the opportunities associated with the transition to a net zero economy.”
Lombard Odier: reported their net zero commitment is “steadfast,” with net zero being thought of as “an inevitable and inescapable end state of the economy.”[22]
CalPERS CIO Dan Bienvenue, in a testimony before the House Judiciary Committee in June 2024, stated:
"This is not collusion; it is collaboration. Every vote that CalPERS casts, and every engagement decision that it makes, is based on a single North Star: what is best for the long-term returns for California’s public servants... Climate change presents an existential threat to the planet—one we cannot afford to ignore as long-term investors.” [29]
Guidance in Light of Updates
The House Judiciary’s investigation highlights the importance of ensuring that participation in climate and responsible investment coalitions aligns with fiduciary duties and transparent governance. To navigate increasing scrutiny, organizations should consider the following steps:
Document Business Objectives: Ensure climate goals and coalition participation are aligned with fiduciary duties, long-term financial performance, and effective risk management. Clearly define and document the business case for addressing climate risks and opportunities.
Engage Stakeholders Proactively: Maintain consistent messaging across investor reports, marketing materials, and public statements to reinforce how sustainability initiatives support financial performance and risk management. Transparent engagement with stakeholders fosters trust and credibility.
Monitor Regulatory and Advocacy Developments: Stay informed about evolving regulatory landscapes, industry best practices, and advocacy efforts supporting sustainable investment, such as those led by the US Sustainable Investment Forum.
Carli Schoenleber
SENIOR COMMUNICATIONS MANAGER (CONTENT AND ENGAGEMENT SPECIALIST)Carli is a Senior Communications Manager specializing in Content and Engagement for Verdani Partners, leading thought leadership articles and the Engagement Committee. She has a decade of experience in the sustainability field, working across diverse roles in environmental communication research, environmental planning, marketing, and wetland science. She holds a B.S. in Environmental Science, Policy, and Management from the University of Minnesota and a M.S. in Forest Ecosystems and Society from Oregon State University.
Vanessa Vlasak
ASSOCIATE ESG MANAGERVanessa is an Associate ESG Manager at Verdani Partners, supporting one of Verdani's largest clients in advancing their ESG program. She has over four years of experience in sustainable real estate and clean energy and is passionate about driving meaningful sustainability initiatives in the commercial real estate sector. Vanessa holds a B.S. in Environmental and Ocean Sciences from the University of San Diego.
About Verdani Partners
Verdani Partners has over 25 years of expertise and manages nearly two billion square feet of real estate, delivering proven strategies that help firms lead in sustainability and outperform benchmarks. We help our clients turn sustainability commitments into action through ESG planning, energy management, decarbonization, compliance, and strategic communications. Partner with us to drive real impact and lasting value.
References
[1] House Judiciary Committee. (2024, December 20). Judiciary Committee probes 60+ companies over ESG ties. House Judiciary Committee Republicans. Retrieved from https://judiciary.house.gov/media/press-releases/judiciary-committee-probes-60-companies-over-esg-ties
[2] House Judiciary Committee. (2024, December 20). Letter to 60+ companies regarding NZAM and GFANZ. House Judiciary Committee Republicans. Retrieved from https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/evo-media-document/2024-12-20-JDJ-THM-re-NZAM_combined.pdf
[3] Webb, D. (2025, January 21). Trillion-dollar US asset manager exits NZAM and Climate Action 100+. Responsible Investor. Retrieved from https://www.responsible-investor.com/trillion-dollar-us-asset-manager-exits-nzam-and-climate-action-100/
[4] CalSTRS. (2024, July 4). Investor statement in support of Climate Action 100+. Retrieved from https://www.calstrs.com/investor-statement-in-support-of-climate-action-100
[5] House Judiciary Committee. (2022, December 6). Judiciary Republicans: Woke companies pursuing ESG policies may violate antitrust law. House Judiciary Committee Republicans. Retrieved from https://judiciary.house.gov/media/press-releases/judiciary-republicans-woke-companies-pursuing-esg-policies-may-violate
[6]Johnson, L. (2023, November 3). House Judiciary subpoenas ESG, net-zero advocates alleging antitrust violations. ESG Dive. Retrieved from https://www.esgdive.com/news/house-judiciary-subpoenas-esg-net-zero-advocates-allege-antitrust-violation/698744/
[7] Johnson, L. (2023, December 12). Vanguard, Arjuna Capital issued House Judiciary subpoenas over ESG probe. ESG Dive. Retrieved from https://www.esgdive.com/news/house-judiciary-subpoenas-vanguard-arjuna-capital-over-esg-probe-antitrust-jordan/702287/
[8] Saulsbery, G. (2023, December 14). House panel to subpoena BlackRock, State Street on ESG practices. ESG Dive. Retrieved from https://www.esgdive.com/news/house-will-subpoena-blackrock-state-street-esg-investigation/702448/
[9] Kerber, R. (2023, June 15). US House Judiciary leader subpoenas documents from climate groups. Reuters. Retrieved from https://www.reuters.com/sustainability/us-house-judiciary-leader-subpoenas-documents-climate-groups-2023-06-14/
[10] Moynihan, L. (2023, December 21). House probe into ESG violations expands to proxy advisors ISS and Glass Lewis. New York Post. Retrieved from https://nypost.com/2023/12/21/business/house-judiciary-probe-into-esg-expands-to-iss-and-glass-lewis/
[11] House Committee on Oversight and Accountability. (2024, February 26). Letter to Mark Van Der Weide, General Counsel of the Federal Reserve System. Retrieved from https://oversight.house.gov/wp-content/uploads/2024/02/022624-Van-Der-Weide-Federal-Reserve-letter.pdf
[12] Johnson, L. (2024, February 28). House GOP launches new probe into ESG investing. ESG Dive. Retrieved from https://www.esgdive.com/news/house-oversight-launches-new-esg-investing-probe-nzam-pri-climate-action-100/708801/
[13] House Judiciary Committee. (2024, June 11). Climate control: Exposing the decarbonization collusion in environmental, social, and governance (ESG) investing. House Judiciary Committee Republicans. Retrieved from https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/evo-media-document/2024-06-11%20Climate%20Control%20-%20Exposing%20the%20Decarbonization%20Collusion%20in%20Environmental%2C%20Social%2C%20and%20Governance%20%28ESG%29%20Investing.pdf
[14] House Judiciary Committee. (2024, June 11). Unsustainable and unoriginal: How the republicans borrowed a bogus antitrust theory to protect big oil. House Judiciary Committee Democrats. Retrieved from https://democrats-judiciary.house.gov/uploadedfiles/2024.06.11_final_esg_report.pdf
[15] House Judiciary Committee. (2024, December 13). Sustainability shakedown: How a climate cartel of money managers colluded to take over the board of America's largest energy company. House Judiciary Committee Republicans. Retrieved from https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/2024-12/2024-12-13-Sustainability-Shakedown-Report.pdf
[16] Kerber, R. (2025, January 9). BlackRock quits climate group as Wall Street lowers environmental profile. Reuters. Retrieved from https://www.reuters.com/sustainability/blackrock-quits-climate-group-wall-streets-latest-environmental-step-back-2025-01-09/
[17] BlackRock. (2025). BlackRock investment stewardship, proxy voting guidelines for benchmark policies – U.S. securities. Retrieved from https://www.blackrock.com/corporate/literature/fact-sheet/blk-responsible-investment-guidelines-us.pdf
[18] Vanguard. (2022, December 7). Corporate statement: An update on Vanguards’s engagement with the Net Zero Asset Managers Initiative (NZAM). Retrieved from https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/update-on-nzam-engagement.html
[19] Jessop, S., & Kerber, R. (2024, February 15). JPMorgan, State Street quit climate group, BlackRock steps back. Reuters. Retrieved from https://money.usnews.com/investing/news/articles/2024-02-15/jpmorgan-fund-arm-quits-climate-action-100-investor-group
[20] Vanguard. (2025). Vanguard’s approach to climate risk. Retrieved from https://corporate.vanguard.com/content/corporatesite/us/en/corp/climate-change.html
[21] Net Zero Asset Managers Initiative. (2025, January 10). Statement on Blackrock’s departure from the initiative. Retrieved from https://www.netzeroassetmanagers.org/statement-on-blackrocks-departure-from-the-initiative/
[22] Net Zero Asset Managers Initiative. (2025, January 13). Update from the Net Zero Asset Managers initiative. Retrieved from https://www.netzeroassetmanagers.org/update-from-the-net-zero-asset-managers-initiative/
[23] Reuters. (2025, January 14). NZAM suspends activities after BlackRock exit amid US political pressure. Retrieved from https://www.business-standard.com/world-news/nzam-suspends-activities-after-blackrock-exit-amid-us-political-pressure-125011400108_1.html
[24] Webb, D., et al. (2025, January 14). Net Zero Asset Managers initiative members split over suspension of activity. Retrieved from https://www.responsible-investor.com/net-zero-asset-managers-initiative-members-split-over-suspension-of-activity/
[25] J.P. Morgan Asset Management. (2024, April). Global proxy voting guidelines. Retrieved from https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/institutional/communications/lux-communication/corporate-governance-principles-and-voting-guidelines.pdf
[26] Climate Action 100+. (2024, June 12). Climate Action 100+ statement on the U.S. House subcommittee hearing. Retrieved from https://www.climateaction100.org/news/climate-action-100-statement-on-the-u-s-house-subcommittee-hearing/
[27] Segal, M. (2025, January 7). JPMorgan leaves Net Zero Banking Group, completing departure of major U.S. banks. ESG Today. Retrieved from https://www.esgtoday.com/jpmorgan-leaves-net-zero-banking-group-completing-departure-of-major-u-s-banks/
[28] Net Zero Banking Alliance. (2025). Members. Retrieved from https://www.unepfi.org/net-zero-banking/members/
[29] Net Zero Banking Alliance (2024, October 1). Banks make significant strides in net-zero commitments, but challenges persist. Retrieved from https://www.unepfi.org/industries/banking/banks-make-significant-strides-in-net-zero-commitments-but-challenges-persist/
[30] Bienvenue, D. (2024, June 12). Testimony before the House Judiciary Committee Subcommittee on Antitrust, Commercial, and Administrative Law. House Judiciary Committee. Retrieved from https://judiciary.house.gov/sites/evo-subsites/judiciary.house.gov/files/evo-media-document/Bienvenue%20Testimony.pdf
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