Republican-led state opens sweeping investigation into woke investing group

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EXCLUSIVE: Louisiana is opening a multipronged investigation into an influential organization that coordinates strategies for the financial sector to tackle climate change.

The probe – which is being spearheaded by Republican Louisiana Attorney General Jeff Landry – will focus in on Climate Action 100+ and two of its U.S.-based global steering committee members, Franklin Templeton and the California Public Employees' Retirement System (CalPERS), according to a civil investigative demand filing first obtained by Fox News Digital on Tuesday.

"When you're in charge of retirement plans or when you have a fiduciary duty to return profits based upon investment to consumers in Louisiana, you're supposed to be using sound economic principles, not, you know, faulty science," Landry told Fox News Digital in an interview. "This is part and parcel of what we've been doing in this space."

Landry's investigation will focus, in particular, on whether Climate Action 100+, Franklin Templeton and CalPERS violated Louisiana consumer protection laws through unfair or deceptive practices. 

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Louisiana Attorney General Jeff Landry is investigating Climate Action 100+, a global organization that seeks to "ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change." (AP Photo/Evan Vucci, File)

The probe, meanwhile, is the latest salvo in the Republican-led pushback against the so-called environmental, social and governance (ESG) movement. ESG standards pursued by groups like Climate Action 100+ and major financial institutions prioritize environmental investments, boosting green energy projects once deemed risky, and corporate social priorities such as boardroom diversity initiatives.

Critics – including attorneys general, state treasurers, the energy industry and consumer advocacy groups – have accused ESG-focused asset managers of sidestepping their legally-mandated fiduciary duty of looking out for the well-being of clients whose money they manage.

"If you're an American corporation and you want to affect policy in this country, then you do it through the political process, not through corporate boardrooms," Landry continued. "What we see is money being poured into these NGO to then try to affect boardroom decisions that are not based upon sound business practices."

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Including offshore production, Louisiana drills the second-most oil and third-most natural gas in the nation, according to the Energy Information Administration. The energy industry is the state's largest sector, accounting for 8.1% of Louisiana's total gross domestic product.

According to its website, Climate Action 100+ is an international "investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change." The organization is composed of multiple regional investor networks and supported by a global steering committee of which Franklin Templeton and CalPERS are members.

Franklin Templeton has a staggering $1.5 trillion in assets under management while CalPERS is the nation's largest public pension fund with more than $400 billion in assets under management, managing pension benefits for more than two million California public employees and retirees.

Gary Gensler, the chairman of the Securities and Exchange Commission, has sought to implement ESG policies. (Al Drago/Bloomberg via Getty Images)

"[Climate action 100+ investors] have committed to engage with the world’s largest corporate greenhouse [gas] emitters to improve their climate performance and ensure transparent disclosure of emissions," U.N. Secretary-General António Guterres said in 2018, praising the group.

"They are betting on green because they understand this is the path to prosperity and peace on a healthy planet. The alternative is a dark and dangerous future."

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The ESG movement, meanwhile, has largely been spearheaded by massive trillion-dollar asset managers and financial institutions like BlackRock, State Street and Vanguard, which have used their sizable stakes in large companies to push the adoption of ESG standards. The movement has also been supported by Democratic lawmakers and the Biden administration, which has moved ahead with various ESG actions over the last 12 months. 

For example, in March 2022, Securities and Exchange Commission Chairman Gary Gensler, who President Joe Biden appointed a year earlier, unveiled rules requiring publicly-listed companies to disclose climate-related information, an action that Republicans and business industry leaders warned may be unconstitutional. 

And earlier this year, a Labor Department rule went into effect allowing retirement plan managers to factor ESG standards into investment decisions.

Climate Action 100+, Franklin Templeton and CalPERS didn't immedietaly respond to requests for comment.