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In response to a letter from the U.S. House Committee on the Judiciary accusing the Unitarian Universalist Association of participating in a “woke” “climate cartel” in violation of antitrust law, the Association has asserted its First Amendment right to express its religious values through socially responsible investing with climate justice goals.
More than 130 U.S.-based investors—including pension boards, retirement plans, and faith organizations—received the July letter from the Republican-led committee. It accuses them of being part of a “‘climate cartel’ consisting of left-wing activists and major financial institutions that collude to impose radical environmental, social, and governance goals on American companies,” according to a news release from the committee.
It demanded information about the investors’ alleged “involvement with the woke ESG cartel Climate Action 100+.” The committee, which has subpoena power, sent the letter to UUA President Rev. Dr. Sofía Betancourt, through committee chair Jim Jordan (R-OH) and Thomas Massie (R-KY), chair of the Subcommittee on the Administrative State, Regulatory Reform, and Antitrust.
All the recipient organizations, including the UUA, are signatories to Climate Action 100+, an investor-led initiative launched in 2017 that is working to influence corporations to reduce carbon emissions and fight climate change to mitigate financial risks and maximize the value of assets.
In its August 15 response to the committee, the UUA emphasized that it pursues climate action and environmental justice goals under the guidance of the annual UUA General Assembly and the Board of Trustees, and that it is under no obligation to take investment advice from Climate Action.
“For over seven decades, the UUA has centered values-based investment as an expression of our religious liberties and shared values.”
“For over seven decades, the UUA has centered values-based investment as an expression of our religious liberties and shared values,” the UUA wrote through its lawyer, Adrienne K. Walker.
“As a religion freely exercising its faith and beliefs and well within its protected free speech rights,” the UUA wrote, “the UUA’s activities are primarily religious and/or political speech beyond the scope and intent of the Sherman Act,” a federal antitrust law that prohibits business practices that restrain competition in the marketplace.
The committee claims to have “direct evidence” of the alleged cartel, as outlined in an interim staff report released in June, “Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing.”
According to its news release, “The Committee continues to examine whether existing civil and criminal penalties and current antitrust law enforcement efforts are sufficient to deter anticompetitive collusion to promote ESG-related goals in the investment industry. The over 130 companies, retirement systems, and government pension programs with membership in Climate Action 100+ must answer for their involvement in prioritizing woke investments over their own fiduciary duties.”
In response, the UUA wrote that it is “concerned that the Letter, including its broad document preservation request, may seek to improperly invade the Constitutionally protected rights to pursue investment strategies aligned with Unitarian Universalism’s values and beliefs.”
The UUA response also gave a brief history of Unitarian Universalism; enumerated its core values, including love and justice; and described the UU Common Endowment Fund (UUCEF), a diversified investment fund that aligns with the faith’s socially responsible investing goals.
“Basically, it’s a First Amendment defense [stating] that faiths can express themselves, including through their investment policy,” says David Stewart, co-financial advisor to the UUA. While he doesn’t believe the House committee will be successful in attempting to leverage antitrust law against the First Amendment rights of the UUA and others, its action “certainly is concerning, and we will be defending ourselves vigorously,” adds Stewart, who is also a member of the UUCEF Investment Committee.
Other Climate 100+ Investors Targeted by Republican-Led Congressional Probe
In addition to the UUA, other faith-based recipients of the letter include the United Church of Christ; the Quaker organization Friends Fiduciary Corporation; JLens, a Jewish investing and shareholder advocacy organization; and a number of Catholic organizations such as Mercy Investment Services, Christian Brothers Investment Services, Loyola Marymount University, and the Sisters of Saint Dominic of Caldwell. Non-religious organizations targeted include the California State Teachers’ Retirement System, Harvard Management Company, Mellon Investments Corporation, and the New Jersey Department of the Treasury.
Many have responded to the committee asserting their First Amendment rights to free speech and freedom of religion.
“Sadly, a few organizations have backed away from their commitment to Climate Action 100+ due to the subpoena threats employed by the House Committee on the Judiciary,” says Stewart.
Stewart says that the Republican-led committee’s action is part of “an ongoing effort” to discredit socially responsible investing (SRI) and ESG investing, which refers to considering environmental, social, and governance factors when making investment decisions.
As a reflection of the faith’s core values, the UUA has been strongly committed to SRI for almost sixty years, since the Eastman Kodak shareholder advocacy efforts to remove discriminatory hiring practices in 1966. Stewart likens the right-wing attacks on ESG investing to the efforts to undermine DEI (diversity, equity, and inclusion) initiatives.
In the past few years, nearly a dozen states, including Texas and Florida, have passed anti-ESG laws. Some of these laws forbid state and local entities, such as government pension funds, from working with investment firms that include ESG factors when making investment decisions. As a result, many investment companies “dropped SRI like a hot potato” because they stood to lose billions of dollars in assets, Stewart notes.
While Stewart was surprised that Republicans are attempting to wield antitrust laws to attack SRI efforts, “it’s just the latest round in the culture wars, and it would be difficult for them to do this without a lot of backing from folks who feel like throwing aside regulatory institutions,” he says. “This is much more about removing restraints on corporate behavior and removing asset owners’ ability to change the course of corporate behavior than it is about religion. It just so happens we are religious investors.”
“The UUA has a long history in being leaders on this, and we continue to be leaders in this effort.”
And, he adds, “There’s a reason there’s a huge anti-SRI effort: it’s because SRI is extremely effective.”
The UUA has led or been part of coalitions that have resulted in significant institutional change at corporations in terms of climate justice and social justice, including how employees are treated.
“The UUA has a long history in being leaders on this, and we continue to be leaders in this effort,” he says. “We may be small, but we have a large impact in the world of investing.”
Mathew Jensen, senior investment officer for the UUA and director of Faith-Consistent Investing Programs at FaithInvest, says it is unclear what will happen now that the UUA has responded to the committee. But the fact the UUA received the letter, he adds, “is actually a good thing . . . it shows the UUA Common Endowment Fund is being impactful.”