The U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice, Antitrust Division (DOJ) filed a Statement of Interest (the Statement) in the Texas-led lawsuit against asset managers BlackRock, State Street, and Vanguard, which alleges that the asset managers acquired substantial stockholdings in every significant publicly held coal producer in the U.S. to influence the policies of these companies to reduce coal production.1 The Statement is the first time during the second Trump administration that the agencies have waded into the highly politicized environmental, social, and governance (ESG) landscape. Indeed, the FTC's press release describes the actions challenged in the lawsuit as "an unlawful left-wing ideological scheme."2
The Texas Lawsuit
The Texas-led lawsuit alleges that the asset managers violated antitrust law through a joint commitment to reduce coal output as a means to effectuate their commitment to reduce carbon emissions through Net Zero Asset Managers Initiative (NZAM). The asset managers allegedly implemented the conspiracy through their common stock ownership of competing coal producers, using their ownership stakes to influence company management to reduce coal production. The lawsuit claims the agreement to reduce output violated Section 1 of the Sherman Act as well as Section 7 of the Clayton Act because their "acquisition, holding, and use of their shares in competing coal companies" substantially lessened competition.
The Statement of Interest
Citing to President Trump's Executive Order 14,156, "Declaring a
National Energy Emergency," the Statement takes aim at what it
describes as "the coordinated use of the power of horizontal
shareholdings to distort output and prices in energy
markets."3 According to the Statement, the asset
managers engaged in concerted action in violation of Section 1 of
the Sherman Act under Interstate Circuit v. United States
and their acquisition of shares in competing coal companies was not
exempt under the Clayton Act's "solely for
investment" exception. Specifically, the statement argues that
the "anticompetitive use of common shareholdings to reduce the
production of American coal to the detriment of American consumers
and businesses" is outside the bounds of permissible
passive-investor behavior.
According to the Statement, the "solely for investment"
exception does not grant perpetual immunity. Instead, under
United States v. E.I. du Pont de Nemours & Co., the
immunity applies as long as stock "is not used by voting or
otherwise to bring about, or in attempting to bring about, the
substantial lessening of competition."4 If an
investor, even a minority one, turns a passive investment into an
active one by exerting anticompetitive influence over its portfolio
of competing firms, such investment is not made solely for
investment purposes.
Additionally, the Statement elaborates on plaintiffs' claim
that the asset managers engaged in an unlawful conspiracy under
Interstate Circuit v. United States. That case establishes
that the acceptance of an invitation to participate in concerted
action is sufficient to establish a violation of Section 1 of the
Sherman Act, regardless of whether there are any communications
among the alleged conspirators.
Increasing Antitrust Scrutiny of ESG Initiatives
Since the first Trump administration, federal antitrust agencies
have trained their focus on ESG initiatives, such as when the DOJ
investigated an initiative among automobile manufacturers and
California regarding emission standards. Makan Delrahim, DOJ's
Assistant Attorney General for the Antitrust Division during the
first Trump administration, explained that "even laudable ends
do not justify collusive means in our chosen system of
laws."5 More recently, FTC Chair Ferguson stated in
a "policy sheet" that, among other things, investigating
and prosecuting alleged collusion on ESG would be a top priority
for the FTC under his leadership.6
State attorneys general have also been active in the ESG space.
Beyond the Texas lawsuit, Nebraska filed an antitrust lawsuit and
Florida launched an investigation. In November 2024, Nebraska,
along with two trade associations of state energy marketers and
Nebraska ethanol producers, sued truck manufacturers and an
industry trade association in Nebraska state court for alleged
violation of Nebraska's antitrust law.7 Reminiscent
of the DOJ investigation during the first Trump administration,
Nebraska alleges that defendants colluded by entering into an
agreement with California relating to regulatory requirements that
Nebraska claims will result in phasing out of medium- and
heavy-duty internal combustion engine vehicles. Likewise, in March
2025, Florida launched an investigation into whether proxy advice
that considers ESG and other factors involves "possible
unlawful collusion" in violation of Florida antitrust law. The
Florida Attorney General is investigating whether Glass Lewis &
Co. and Institutional Shareholder Services Inc. colluded in
adopting and enforcing ESG investing policies.
Congress has also been active in scrutinizing ESG initiatives. The
U.S. House Judiciary Committee issued two reports, one in June 2024
and another in December 2024, following an investigation into an
alleged "climate cartel [that had] agreed to decarbonize the
American economy by forcing corporations to disclose their carbon
emissions, to reduce their carbon emissions, and to enforce (and
reinforce) their disclosure and reduction commitments by
handcuffing company leadership and muzzling corporate free speech
and petitioning."8 A subsequent investigation by
the U.S. House Judiciary Committee into over 60 U.S.-based asset
managers regarding their involvement in the Glasgow Financial
Alliance for Net Zero and NZAM resulted in leading U.S.-based
financial firms withdrawing from the organizations and NZAM
launching an evaluation about whether it could continue to operate
given the presently hostile climate against ESG.9
Conclusion
Antitrust scrutiny of ESG initiatives is likely to increase as the Trump administration's FTC and DOJ leadership settle into their new roles. Actions by state attorneys general and Congress, are also likely to increase. All these efforts are likely to spur follow-on lawsuits from private plaintiffs. Given the heightened scrutiny, companies engaged in ESG initiatives — either through their own operations or through their ownership of other companies — should consult antitrust counsel and proactively manage enforcement and litigation risk.
Footnotes
1 Complaint, Texas v. BlackRock, Inc. et al., 6:25-c-v-00437 (Nov. 17, 2024 E.D. Tex.).
2 Press Release, FTC, FTC and DOJ File Statement of Interest in Energy Collusion Case Against BlackRock, State Street, and Vanguard (May 22, 2025).
3 Statement of Interest, Texas et al. v. BlackRock, Inc. et al., 6:25-c-v-00437 (Nov. 17, 2024 E.D. Tex.).
4 353 U.S. 586, 589 (1957).
5 Makan Delrahim, DOJ Antitrust Division: Popular Ends Should Not Justify Anti-Competitive Collusion, USA Today (Sept. 19, 2019).
6 Andrew N. Ferguson, FTC Commissioner Andrew N. Ferguson for FTC Chairman (last visited Mar. 20, 2025).
7 Complaint, Nebraska et al. v. Daimler Truck North America et al. (Nov. 19, 2024 Neb. Lincoln Cnty).
8 H.R. Comm. on the Judiciary, Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Initiatives (Jun. 11, 2024).
9 Press Release, Update from the Net Zero Asset Managers Initiatives, NAZM (Jan. 13, 2025).
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