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What You Need to Know
- Key takeaway #1 Five state attorneys general issued letters "calling out" prominent recycling and circular-economy collaborations related to plastics and packaging, asserting that their activities may violate antitrust and consumer protection laws.
- Key takeaway #2 The letters demonstrate that state enforcers continue to investigate sustainability-related collaborations on antitrust and consumer protection grounds, underscoring the importance of integrating compliance considerations into sustainability initiatives.
- Key takeaway #3 The letters demonstrate that state enforcers continue to investigate sustainability-related collaborations on antitrust and consumer protection grounds, underscoring the importance integrating compliance considerations into sustainability initiatives.
Key takeaway #4
There are practical steps that companies should take when considering sustainability-focused collaborations, standards, or goals, which we have discussed in a previous client alert and an ABA Section of Environment, Energy, and Resources' Trends article.
Introduction
On October 29, 2025, the attorneys general of Florida, Texas, Iowa, Nebraska, and Montana (the "State AGs") jointly issued letters to three sustainability groups asserting that their plastics recycling initiatives may violate state and federal antitrust and consumer protection laws.
The State AGs' letters represent a distinct extension in state attorney general enforcement activity concerning environmental and sustainability-related matters. Past actions by predominantly "blue state" attorneys general have tended to focus on "greenwashing" claims — i.e., alleged deceptive advertising and misleading statements by fossil fuel companies regarding the effects of plastics pollution or by investors regarding the sustainability of portfolio companies. Recent claims by predominantly "red state" attorneys general have attacked ESG- and sustainability-focused investments in the opposite direction, i.e., as practices that allegedly deceive or harm investors or consumers by pursuing non-financial goals. And recent litigation has alleged coordinated shareholder engagement with coal companies that supposedly reduced output. The October 29 State AGs' letters extend these types of anti-ESG claims by taking aim at basic sustainability-related standard-setting, pilot project, and stakeholder engagement collaborations that are common in many industries.
The State AGs' Letters
The State AGs' letters, addressed to the Consumer Goods Forum, the Green Blue Institute, and the U.S. Plastics Pact, focus on each group's setting of targets and standards for recyclable packaging materials and design, private initiatives to support a circular economy transition, and collaborative engagement with stakeholders and public officials. The State AGs assert that such activities may artificially inflate prices and violate antitrust and consumer protection laws. Importantly, the State AGs further assert that environmental goals are not defenses to potential antitrust violations.
The State AGs' letters conclude with a request that each group respond to the letters' concerns and seek an explanation of "the legal basis" for why each group believes it has not violated relevant antitrust and consumer protection laws.
Potential Challenges to the State AGs' Letters
The State AGs' letters appear to expand the scope of recent antitrust and consumer protection law attacks on sustainability collaborations. Among other points, they appear more squarely to advance a boycott-type theory against standard-setting activities that define and support sustainability activities.
Such a broadening of antitrust theories is likely to face significant obstacles. In particular, the collaborative setting of standards to meet customer preferences has been recognized as a pro-competitive activity. Though such activities may disadvantage and reduce the output of producers and products that do not meet the standards, they generally do not raise serious antitrust concerns outside narrow circumstances where pretextual standards are a tool to exclude the standard-setters' own rivals. See generally Nw. Wholesale Stationers, Inc. v. Pac. Stationery Printing Co., 472 U.S. 284, 293-97 (1985). For this reason, while many states have adopted laws defining application of sustainability or ESG criteria in certain contexts to be a prohibited "boycott," asserting the similar claim that sustainability standards are a "collective boycott" under traditional antitrust law faces strong defenses. Similarly, the letters' assertions that the collaborations in question have facilitated research and development and pilot projects that companies would not have pursued individually describes a long-recognized pro-competitive justification for interfirm collaboration, see generally DOJ and FTC, Antitrust Guidelines for Collaborations Among Competitors 5-6 (2000) (withdrawn 2024), and still other accusations would need to overcome the so-called Noerr-Pennington defense which immunizes joint government petitioning activities, see E. R.R. Presidents Conf. v. Noerr Motor Freight, 365 U.S. 127 (1961).
Further, the State AGs' letters dismiss sustainability-related justifications as "social welfare concerns" that cannot justify restraints on competition. This framing has been a refrain for anti-ESG and anti-sustainability accusations based on antitrust theories. However, it ignores that credibly marketing one's products and business as sustainable is a legitimate way to compete for customers, suppliers, and investors, making many sustainability-related collaborations — particularly those involving standard-setting and research and development activities — pro-competitive by definition.
Conclusion
State attorneys general are increasingly using their enforcement authority to regulate ESG- and sustainability-focused activities, often invoking antitrust theories to do so. Inquiries like the State AGs' letters underscore the importance of businesses and industry associations' remaining diligent and aware of state attorney general activity, tracking closely each state attorney general's antitrust and consumer protection priorities, and embedding antitrust and consumer protection compliance in ESG- and sustainability-related activities.
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