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Financial giants under review for ‘fossil fuel boycotts’ among sponsors of US anti-ESG group

Federated Hermes, Invesco, Fidelity Investment and Wells Fargo listed as “sponsors” by US foundation, while JP Morgan and KKR are flagged as “friends of SFOF sponsors”.

Federated Hermes, Wells Fargo and Fidelity Investments are among the sponsors of the State Financial Officers Foundation (SFOF), which has been accused of being actively involved in the anti-ESG pushback sweeping across the US. 

According to its website, the SFOF’s mission is to “drive fiscally sound public policy, by partnering with key stakeholders, and educating Americans on the role of responsible financial management in a free market economy”. 

Among its financial officers are Texas Comptroller Glen Hegar, West Virginia Treasurer Riley Moore, Arizona Treasurer Kimberley Yee, and Kentucky Treasurer Allison Ball. 

The foundation has taken a strong stance against ESG on social media and also appears to be supporting the pushback against it, which has caused concern across the responsible investment community.  

According to emails seen by Responsible Investor, the SFOF was involved in the organisation of a letter sent to John Kerry denouncing efforts by the Biden administration to push Wall Street to adopt near-term climate commitments and increase allocations for climate-friendly finance. 

At the time of publication SFOF had not responded to Responsible Investor’s request for comment on this claim.

And earlier this month, the foundation sent a letter – signed by 23 of the 27 SFOF financial officers – to the Securities and Exchange Commission highlighting “eight concerns” with the latter’s proposed climate disclosure rule. 

On SFOF’s website, Federated Hermes, Invesco, Fidelity Investment and Wells Fargo are listed among its “sponsors”, while JP Morgan and KKR are flagged as “friends of SFOF sponsors”. 

According to the website: “SFOF corporate partners are a vital part of our organisation. Our donors and sponsors make an annual, non-refundable, commitment to support the State Financial Officers Foundation (SFOF) and its activities. A part of the partnership includes sponsorship of our national meetings.”

It continues: “Our corporate sponsors and state government leaders work together to provide the best possible free-market solutions for the states. At our national meetings, corporate partners sit and participate side-by-side with our state leaders.”

At the time of publication, SFOF had not responded to RI’s request for clarification on the difference between “sponsors” and “friends of SFOF sponsors”.

Several firms in the two groups have been targeted by members of the SFOF as part of the anti-ESG drive.

Wells Fargo is among the financial institutions put on notice by SFOF financial officers Hegar and Moore in their states in relation to new legislation banning the boycotting of fossil fuel firms. Fidelity Investments and Invesco have also been put on notice by Hegar. JP Morgan Chase division is being looked into by both. 

Asked by RI whether this overlap had come up in discussions and/or could impact their investigations, Hegar’s office said: “The overlap has not come up in any discussions and it has had no impact on the construction of the SB 13 list [of financial institutions found to be boycotting fossil fuel firms].” 

A spokesperson for Moore said: “Our office isn’t going to comment publicly on any of the companies involved until after the involved companies have had time to appeal the decision and the list is finalised and published. Our evaluation for this list will be guided strictly by the criteria detailed in the law. I would have to refer you to the State Financial Officers Foundation for inquiries regarding any partnerships they may have.” 

RI asked the six named financial institutions how their sponsorship of SFOF was aligned with their ESG strategy and, for those on notice over anti-ESG legislation, whether they had raised the issue with SFOF.  

JP Morgan, Federated Hermes, and Invesco declined to comment, while Fidelity Investments and Wells Fargo had not responded at the time of publication. 

A spokesperson for KKR told RI: “KKR supports SFOF and its peer organisations NAST because they provide valuable education on responsible state treasury programmes and related financial practices, policies and education.

“While we were not aware of or involved in the letter [sent to John Kerry], we believe in the importance of a sustainable energy transition, one that supports a shift to a clean energy future while recognising the ongoing importance of supplying the conventional energy needed for well-being, security and economic growth around the world today.

“Our membership in organisations that support state treasuries does not translate into an endorsement of every policy position.”

The private equity giant also stressed its ESG credentials. “We are big believers that ESG management makes us better investors and are proud of our 15-year track record of backing those beliefs with action. We have incorporated ESG integration into all of our investing and diligence activities, including responsibly investing in energy assets. This means everything from investing billions of dollars in renewable energy production and, where we do invest in conventional energy, taking significant action to reduce greenhouse gas emissions and improve ESG performance at those companies.”