GOP Senators Threaten Action Over ESG Antitrust Violations
If the red wave materializes, or if Republicans achieve a majority, we may see new action on ESG. I say may because we have yet another sternly worded letter, which at this point is nothing more than that. This letter is directed at 51 law firms and warns them that they and their corporate clients could be in violation of antitrust laws should they decide to pursue ESG initiatives. The letter, signed by senators Chuck Grassley of Iowa, Tom Cotton from Arkansas, Utah’s Mike Lee, Marco Rubio from Florida, and Tennessee’s Marsha Blackburn, tells the firms that they and their clients should save any documents pertaining to EGS participation in preparation for possible oversight by Congress.
The letter cites a recent Senate Judiciary Committee hearing in which the subject of ESG collusion was raised. FTC Commissioner Lina Khan said that no exemptions from antitrust laws exist for ESG, but that ESG cooperation or agreements that could impact competition are relevant to the FTC. Jonathan Kanter, Assistant Attorney General of the Antitrust Division, expressed a similar idea, telling the committee in part that he agrees with “the sentiment that collusion is anticompetitive, and I also agree with the underlying sentiment that when firms have substantial power and they use that power to achieve anticompetitive ends, that should be actionable under the antitrust laws.”
The final paragraph of the letter begins, “The ESG movement attempts to weaponize corporations to reshape society in ways that Americans would never endorse at the ballot box.” The senators are concerned about possible collusion to restrict oil, gas, and coal in an effort to drive up energy prices and “empower” America’s enemies. In the letter, the senators warned the law firms that in the ensuing months and years, Congress will be looking carefully at potential antitrust violations involving ESG, and, where appropriate, will make referrals to the FTC and the DOJ.
Related: BlackRock Gets Downgraded for the Increasing Political Risk of ESG Investing
Brave words to be sure, and my personal experience with Mike Lee tells me that he at least would seriously pursue the issue if it is not shunted to the back burner after the election. And of course, this is all contingent on what happens at the ballot box today.
Read the full text of the letter here.
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