JP Morgan Chase CEO changes tune on ESG investing as movement takes dive

JP Morgan Chase CEO Jamie Dimon last week emphatically slammed Environmental, Social and Governance (ESG) investing, a practice in which investment funds are funneled towards companies who fit the “woke” narrative and away from those who do not. 

Experts have been warning that ESG investing will lead to banks and financial institutions becoming the “new legislators” as they force compliance with certain behaviors, including ESG. Last week, JP Morgan Chase abruptly canceled the bank account of Yeezy, rapper Kanye West’s company, while Bank of America canceled the bank account belonging to Catturd, a popular conservative voice on social media, without warning or explanation. Similarly, Chase Bank closed former Trump national security adviser Lt. Gen. Michael Flynn’s bank account in 2021 due to “reputational reasons”, according to The Heritage Foundation.   

BlackRock CEO Larry Fink, who heads one of the world’s largest investment firms, was candid about how the company approaches ESG.  

“You have to force behaviors, and at BlackRock, we’re forcing behaviors,” said Fink in 2017.    

“ESG matters are an important consideration in how we do business,” says JP Morgan Chase’s website. 

But at a recent investor seminar, JP Morgan Chase CEO Dimon said “investors don’t give a s***” about ESG and blasted company executives for “ceding governance to do-gooder kids on a committee” based on their compliance with ESG, according to the New York Post. 

Dimon's remarks come as companies and institutions are taking financial nose-dives due to their participation in the ESG movement. 

One of those corporations is BlackRock, which is also one of JP Morgan Chase’s top shareholders. BlackRock’s commitment to “forcing behaviors” has not been embraced by all, with several US states divesting from the investment giant in recent months. This month, South Carolina State Treasurer Curtis Loftis announced plans to pull the state’s remaining $200 million of holdings currently invested in BlackRock. The announcement came a week after Louisiana State Treasurer John Schroder declared his intention to divest $800 million of the state’s holdings from BlackRock, following a similar move by Texas a week earlier. 

Last week, BlackRock was downgraded by UBS analyst Brennan Hawken, who slashed the company’s stock price from $700 to $585 and changed its rating from Buy to Neutral. 

“We are downgrading BLK to Neutral based on environmental pressure to earnings and risk from the firm’s ESG positioning,” Hawken said. 

But it isn’t just Goliath investment firms taking a hit because of their involvement with ESG. 

Harvard University reported a $2.3 billion loss in its endowment during the last fiscal year. Harvard Management Company CEO N.P. Narvekar blamed the loss in part on “the University’s commitment to tackling the impacts of climate change, supporting sustainable solutions, and achieving our stated net Zero goals,” which “weighed upon performance.”