Louisiana launches ESG probe into major climate fund pushing green investments

Louisiana Attorney General Jeff Landry launched an investigation Tuesday into a leading pro-ESG, investor-led coalition that seeks to combat climate change by getting corporations to slash their emissions and carbon footprints.

The Republican official said he is probing Franklin Templeton and the pension system for public employees in California known as CalPERS for their roles as U.S. leaders of the international Climate Action 100+ initiative.

“ESG investing puts politics over people and raises significant concerns that companies guided by these green-energy fantasies may be engaging in unfair and deceptive practices that harm Louisiana consumers,” Mr. Landry said. “Franklin Templeton is deeply embedded in Climate Action 100+; and we are troubled that, by focusing on the radical ESG agenda, it may be violating its fiduciary duties to shareholders in our state.”

The investigation is part of a broader war against environmental, social and corporate governance investing known as ESG, which conservatives call “woke capitalism” because of its climate-friendly practices. Republicans say ESG advances a liberal agenda over maximizing financial returns, while defenders of the investment strategy say it takes into consideration clients’ moral values and unforeseen risks from climate change.

Climate Action 100+ is composed of 700 investment companies from around the globe with more than $68 trillion in assets under management, and is a global leader in ESG. Franklin Templeton and CalPERS are both on the Climate Action 100+ Steering Committee, which helps monitor companies’ progress on going green.

Climate Action 100+, Franklin Templeton and CalPERS did not immediately respond to requests for comment.

CalPERS, the nation’s largest public pension fund that had more than $440 billion in assets under management as of last year, does not have business in Louisiana and is not under Mr. Landry’s jurisdiction. But he is seeking to determine whether the fund’s influence in Climate Action 100+ may violate Louisiana consumer protection laws and negatively impact the state’s energy-rich economy.

Franklin Templeton has roughly $1.5 trillion in assets under management and does operate in Louisiana.

Mr. Landry said his multipronged probe seeks to determine whether companies targeted by Climate Action 100+ violated consumer protection laws, if non-governmental organizations associated with the coalition have made public comments that might violate Louisiana law and if Climate Action 100+ has urged corporations to adopt “radical, far-left positions on ESG.”

Climate Action 100+ also recently came under the microscope of Republicans in Congress.

House Republicans, led by the now-Chair of the House Judiciary Committee Jim Jordan, last December demanded information about the coalition amid suggestions it could be running afoul of antitrust laws. Republicans accused the group of using its influence to “work like a cartel” and force corporations to combat climate change.

“When companies agree to work together to punish disfavored views or industries, or to otherwise advance environmental, social, and governance (ESG) goals, this coordinated behavior may violate the antitrust laws and harm American consumers,” Mr. Jordan, Ohio Republican, and other GOP lawmakers wrote at the time to Climate Action 100+.