House Judiciary Republicans probe possible antitrust violations involving ESG movement

Rep. Jim Jordan, R-Ohio., speaks at DMI Companies in Monongahela, Pa., Friday, Sept. 23, 2022. (AP Photo/Barry Reeger)

RALEIGH — Investigations and complaints from state-level officials into the environmental, social, and governance (ESG) movement have been going on for the better part of the last year, however, members of Congress are also picking up the topic. 

Republicans on the House Judiciary Committee led by Ohio Rep. Jim Jordan issued a letter to steering committee executive for Climate Action 100+ Mindy S. Lubber and Simiso Nzima. The letter outlines antitrust violation concerns related to ESG practices. 

Jordan is the incoming chair of the House Judiciary Committee. Other Republicans joining the letter include Reps. Dan Bishop (NC), Matt Gaetz (FL), Scott Fitzgerald (WI), Cliff Bentz (OR) and Tom McClintock (CA). 

“We are writing to you because of your roles coordinating how some companies pursue environmental, social, and governance (ESG) policies in ways that may violate antitrust laws. Each of you is on the Steering Committee for Climate Action 100+, which seems to work like a cartel to “ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change,” the letter reads. 

The House Judiciary Committee Republicans tweeted out a portion of the letter, along with a quote from Bishop that reads, “ESG is, at its heart, radical partisan activism masquerading as responsible corporate governance. These corrosive practices may violate our nation’s antitrust laws, and we must be relentless in investigating them.”  

In addition to ”climate change,” the Republican’s letter says ESG goals have gone beyond climate change activism and can include other policy concerns, such as “fake news dissemination,” “gun control,” and “access to abortion.” 

The letter demands a host of documents, communications and other correspondence to be turned over to the congressional committee no later than 5:00 p.m. on Dec. 20 of this year. The letter also “serves as a formal request to preserve all existing and future records and materials relating to the topics addressed in this letter.” 

“Woke corporations are collectively adopting and imposing progressive policy goals that American consumers do not want or do not need. An individual company’s use of corporate resources for progressive aims might violate fiduciary duties or other laws, harming its viability and alienating consumers,” Republicans wrote. “But when companies agree to work together to punish disfavored views or industries, or to otherwise advance environmental, social, and governance (ESG) goals, this coordinated behavior may violate the antitrust laws and harm American consumers.” 

In a press statement announcing the letter, Republicans cited a June op-ed published in the Wall Street Journal by Sean Fieler, the president of Equinox Partners. Fieler’s op-ed outlined how “The ESG Movement Is a Ripe Target for Antitrust Action.” 

“Advancing the ESG agenda requires that the owners of capital collude to restrict the supply of certain goods and services,” Fieler wrote, after highlighting how ESG standards have effectively crushed oil and gas production. “Regardless of the colluding parties’ motivations, this is a textbook antitrust violation.” 

Also cited in the press release is Arizona Republican Attorney General Mark Brnovich’s antitrust investigation into the Climate Action 100+ network launched in November 2021. 

“Here’s what is happening: The biggest banks and money managers seek to implement a political agenda, such as compliance with the Paris Climate Accord. Then a group mobilizes: Climate Action 100+, for example, comprised of hundreds of big banks and money managers that together manage $60 trillion,” Brnovich explained in a Wall Street Journal op-ed.  “The group uses its coordinated influence to compel companies to shut down coal and natural-gas plants. The activism can include pushing climate goals at shareholder meetings and voting against directors and proposals that don’t comport with the agenda, even if other decisions may benefit investors.” 

He also led a coalition of 19 states attorneys general in sending an August 2020 letter to Blackrock, the largest asset management group in the world, that warned of potential antitrust violations associated with Blackrock’s ESG activities. 

As of October, a number of state treasurers have already pulled $1 billion in taxpayer funds from BlackRock’s management, per the New York Post. 

On Dec. 9, N.C. State Treasurer Dale Folwell issued a press release calling for BlackRock CEO Larry Fink to “resign or be removed” from the firm over a “a loss of confidence in Fink’s leadership” due to his focus on ESG initiatives. 

“As keeper of the public purse my duty is to manage our investments to ensure that the best interests of those that teach, protect and serve, as well as of our retirees, are always paramount,” Folwell said in the release.  

The North Carolina Retirement Systems (NCRS) have approximately $14 billion invested through BlackRock in various active but mostly passive funds at the lowest possible investment fees, in addition to around $55 million passively invested in BlackRock stocks or bonds, according to Folwell’s office. 

The press release states that “BlackRock and Mr. Fink have been using the financial power of their clients to force the global warming agenda by using their proxy voting authority to push companies to “net zero,” often in conflict with their fiduciary responsibilities.” 

“Unfortunately, Mr. Fink’s political agenda has gotten in the way of his same fiduciary duty. A focus on ESG is not a focus on returns, and potentially could force us to violate our own fiduciary duty of loyalty,” said Folwell. “Ultimately, Mr. Fink’s continued ideological pressure could result in using ESG scores against states and local governments, lowering their credit ratings and thus driving up their cost of borrowing at taxpayers’ expense.” 

About A.P. Dillon 1308 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_