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US Investors not Breaching Fiduciary Duty

An independent legal memo has found that investors or companies joining collaborative climate groups such as the Net Zero Asset Managers initiative while making independent investment choices are at “negligible risk” for antitrust claims. The analysis by law firm Jenner & Block specifically addressed a letter signed by 21 US Republican state attorneys-general that was issued to asset managers and owners, warning that their consideration of climate factors risked breaching their fiduciary duty, antitrust rules and securities laws. The memo argued that investors’ consideration of climate risk in investment decision-making, company engagements, proxy voting and investor collaborations was unlikely to constitute a breach. The legal theories outlined in the attorneys-general letter were unlikely to succeed in litigation, the law firm added. “These authoritative analyses should provide confidence to investors, asset managers, asset owners, companies, and other actors within the financial system who are facing highly politicised scrutiny because of climate considerations,” said Maria Lettini, CEO of US SIF. “This confirmation is much needed for shareholders who have faced punitive backlash from state policymakers. This is another instance of politicians inappropriately interfering with asset managers’ fiduciary duty to evaluate risk and act in the best interest of investors.”

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