*

Republican-led committee alleges climate collusion among

asset

managers

*

BlackRock ( BLK ) and State Street concerned about regulatory

scrutiny

*

Ceres says it does not control shareholder votes

By Isla Binnie, Ross Kerber

NEW YORK/BOSTON, Dec 13 (Reuters) - Top U.S. asset

managers were worried that signing up to an industry climate

initiative could make them appear to be working too closely

together and draw regulatory scrutiny, according to a report

released on Friday by a Republican-led U.S. congressional

committee.

The report is the latest released by the U.S. House Judiciary

Committee's Republican majority as part of a probe they say has

shown fund firms and activists are part of a "climate cartel"

that colludes through shareholder organizations pressing to cut

emissions. The committee's Democrats have dismissed those

allegations.

Top fund firms have denied wrongdoing, but material cited in

the report shows they had always been concerned about appearing

too cozy with shareholder groups engaged in climate activism.

BlackRock's ( BLK ) view in 2019 was that "We don't do collective

action/engagements. Too risky," according to the report, citing

an emailed summary of a meeting that unidentified BlackRock ( BLK )

executives held with Ceres, a Boston-based environmental

advocacy group, obtained by the committee.

Likewise State Street also raised concerns around

2020 about "collusion" if it joined a Ceres-backed effort to

press companies to cut emissions known as the Climate Action

100+, or CA100+, according to the report. The firm worried about

raising the "perception of engaging or voting as a block," the

report states.

BlackRock ( BLK ) declined to comment. State Street did not comment.

Both wound up joining the CA100+, then stepped back earlier this

year, citing independence concerns, as the group sought for

members to take stronger actions.

Republican officials, many of them from oil and gas

producing states, have objected to investors coordinating to

pressure corporate management on climate issues at the expense

of corporate growth and returns.

Last month Republican attorneys general from 11 states sued

BlackRock ( BLK ), State Street and Vanguard, saying their climate

activism reduced coal production and boosted energy prices. The

firms collectively manage $26 trillion. BlackRock ( BLK ) and State

Street have denied wrongdoing, while Vanguard has declined to

comment on the matter.

U.S. President-elect Donald Trump campaigned against President

Joe Biden's moves to fight climate change and promised to boost

U.S. oil and gas production. In theory Trump's administration

could follow up on the congressional committee's findings.

A spokesperson for the committee declined to comment on what

talks, if any, it may have had with current or future

administrations.

A section of the committee's report describes how the top fund

firms helped elect dissident directors at energy leader Exxon

in 2021, under pressure by activists including Ceres.

In a statement Ceres said: "The claims in the U.S. House

Judiciary Committee report are completely false. Climate Action

100+ does not control how shareholders vote, nor has it ever

done so."

Moreover, the dissident directors have been overwhelmingly

reelected in each year since, Ceres said, a result "completely

inconsistent with the claim that they were somehow a hostile

force in the company."