Does ESG Violate America’s Antitrust Laws?

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The most prominent Wall Street investment companies and Fortune 500 companies have adopted ESG metrics over the last few years. BlackRock, Vanguard and almost all the country’s biggest financial management companies have joined the ESG train. They also control trillions of dollars of assets that are largely owned by everyday Americans, in the form public pension plans, retirement accounts, and other investments.

Although much has been said about whether ESG is a sound investment framework that favors left-wing ideologies over profits, it’s even more likely that ESG violates Americas antitrust laws.

The argument that ESG violates America’s antitrust laws is gaining momentum in Congress, which will soon fall under the control of the GOP.

Rep. Jim Jordan (R.OH) announced on December 6 that the Committee on the Judiciary would investigate the matter at the 118th U.S. Congress next month.

According to Jordan’s letter and that of several Republican colleagues,

“Woke corporations collectively adopt and impose progressive policy goals that American customers do not want or need. Individual companies’ use of corporate resources to achieve progressive goals could be in violation of fiduciary obligations or other laws. This can harm a company’s viability and alienate consumers. However, if companies work together to punish disfavored industries or views, or otherwise advance environmental, socio- and governance (ESG), this coordinated behavior could violate antitrust laws and cause harm to American consumers.

Jordan specifically cites this.

Federal and state antitrust laws may be violated if Corporate America colludes in pursuit of ESG goals. Antitrust law generally prohibits cooperation between competitors in certain areas, including coordination of ESG goals. Antitrust law generally prohibits cooperation between competitors in ways that limit price, output, quality, or both. One antitrust expert explained that even the most noble motives don’t excuse anti-competitive collusion. This is a long-standing antitrust law.

Jordan ended his letter with the following ominous warning: “Ultimately, [a]dvancing ESG agenda requires owners of capital to collude in restricting the supply of certain goods, services’ and that is — regardless of motives –a ‘textbook Antitrust violation.”

Jordan simply stated that collusive behavior by financial firms like BlackRock is illegal, even though it is aimed at avoiding the “existential crisis” of climate change.

A number of Republican senators have also stated that ESG is in violation of antitrust laws. They are asking for the Department of Justice (DJ) to investigate the matter.

A letter from Sen. Marsha BLACKBURN (R-TN)

“FTC Commissioner Lina Khan, Assistant Attorney General for the Antitrust Division Jonathan Kanter were questioned about ESG collusion during a recent Senate Judiciary Committee Hearing. Commissioner Khan stressed that ESG laws are not exempt from antitrust laws. Concerning ESG group initiatives she stated that ‘certainly, those types of cooperation and agreements, in so far as they can affect competition are always relevant to’ FTC. Assistant AG Kanter expressed his agreement with “the sentiment that collusion can be anticompetitive” and said, “Certainly, those types of cooperation or agreements, in as much as they can affect competition, are always relevant to’ the FTC.”

Blackburn also added

The ESG movement aims to use corporations to change society in ways Americans wouldn’t support at the polls. The collusive effort by the ESG movement to limit the supply of oil and coal is particularly concerning. This is pushing up energy prices around the world and giving America an advantage over its adversaries overseas. In the months and years ahead, Congress will use its oversight power to examine institutionalized antitrust violations committed under the name of ESG and refer those violations the FTC or the Department of Justice.

The fight against ESG is clearly still in its infancy. Some states have decided that divesting state funds from financial companies pushing ESG is the best option. Others have formed coalitions to pursue civil investigative demands.

It would be foolish to think that the well-funded interests behind the ESG agenda will give up without a fight. An all-fronts attack via We the People and the states is the best way to combat the ESG behemoth. It seems that those of us who are against the corrupt ESG scheme and support individual liberty and free-market capitalism are finally coming together.