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Federated Hermes,a $669 billion global investment manager that markets itself as a pioneer of responsible investing but has recently been revealed to be a “gold sponsor” of the State Financial Officers Foundation.Credit:Alamy

The foundation is a non-profit organisation,supported by a large number of Republican state treasurers and auditors,which has been strongly campaigning against action on climate change and environmental,social and governance (ESG) investing,describing it as a “scam” likely to damage the US economy.

The stewardship team at Federated Hermes,known as EOS,oversees $320.5 billion in assets under advice in Australia through partnerships with superannuation firms,mainly by providing advisory services to help local investors assess ESG risks in international companies.

The Age and The Sydney Morning Herald revealed earlier this month that a number of Australian super funds hadexpressed their concerns with Federated Hermes about their connection to the State Financial Officers Foundation.

A source with knowledge of the situation,who was not authorised to speak publicly,confirmed the sponsorship would not be renewed after Federated Hermes managing director and chief investment officer for cash,Dennis Gepp,was quoted inNet Zero Investorduring a conference in London last week.

“These things come up for annual revision. We will not be renewing our membership and our sponsorship of that organisation,” Gepp said.

Federated Hermes declined to comment.

The sponsorship of the foundation was firstquestioned by some of its Danish pension fund clients, followed by concerns raised by Australian funds,including Cbus and Aware Super.

The Australian Council of Superannuation Investors also wrote to Federated Hermes to say it had “strong concerns” as the sponsorship ran “contrary to the approach taken by Australian superannuation funds and asset managers on responsible investment”.

Several climate activist organisations in the UK also mountedcampaigns against Federated Hermes over the sponsorship,labelling it hypocritical. They handed out flyers outside the investment manager’s London office and activists picketed conferences sponsored by Federated Hermes.

ANew York Times investigation this month found that the State Financial Officers Foundation was at the centre of a push from Republican politicians to thwart climate action,in part by using the tax dollars they control topunish companies that promise to reduce greenhouse gas emissions.

In the last several weeks,the State Financial Officers Foundation removed the logos of its sponsors from its website.

The foundation has lobbied against proposals by US regulators to create new climate risk disclosure standards for companies,declaring the proposal “indulges in irrational climate exceptionalism,elevating climate issues to a place of prominence in disclosures that they do not deserve”.

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