House committee report says ESG-focused ‘climate cartel’ is colluding, violating antitrust laws

A House Judiciary Committee released a report Tuesday that alleges a ‘climate cartel’ comprised of left-wing environmental activists and major financial institutions colluded to force American companies to adopt anti-fossil fuel policies, which have in turn, harmed U.S. consumers. 

The interim report was the product of a two-year investigation by House Judiciary Republicans into whether “woke” companies were engaging in behaviors that violate antitrust laws. 

“Today’s report demonstrates a clear violation of antitrust laws among the companies cited. It indicates both an agreement and a reduction of output – the two standards necessary to establish antitrust,” Rep. Harriet Hageman, R-Wyo., who serves on the Judiciary Committee, told Just the News. 

The interim report, titled "Climate Control: Exposing the Decarbonization Collusion in Environmental, Social, and Governance (ESG) Investing" is based on millions of pages of documents, some of which were obtained through subpoenas, as well as interviews or depositions with “key players within the climate cartel.” 

According to the report, Climate Action 100+, an investor group of more than 700 investors and 170 companies, “bullies and threatens asset managers, weaponizing their climates to force them to join and obey the climate cartel.” The goal of these actions was to get the companies to reduce their carbon emissions in line with the 2015 Paris Agreement, which the report argues forces companies to reduce output and increase prices to consumers. 

“What is equally troublesome is that the purpose of this collusion is to ultimately harm both consumers and shareholders. Among the industries targeted are the fossil fuel, aviation, and farming business sectors that are critical to our existence. In essence, this collusion inhibits our ability to heat our homes, drive our cars, grow our food, raise our livestock, and travel freely. More expensive energy, travel, and food means a lower standard of living for Americans,” Hageman said. 

As an example of the alleged bullying and collusion, the report documents how in 2019, Blackrock, with $8.7 trillion in assets under management, and Vanguard, with $8.2 in assets under management, voted against all of the shareholder proposals backed by Climate Action 100+.

As a result of that vote, Ceres, an anti-fossil fuel nonprofit that works to “accelerate the transition to a cleaner, more just, and sustainable economy…with powerful networks of investors and companies,” initiated a campaign to pressure several of the world’s leading asset managers to align their corporate commitments to Climate Action’s values. This would, according to the report, put pressure on “recalcitrant companies.” 

The California Public Employees Retirement System (CalPERS), which oversees $485.8 billion in investments that support the state’s retirement system, helped found and continues to help lead Climate Action 100+. The report accuses CalPERS of using its portfolio to advance a left-wing political agenda. 

Among the actions the report documents is CalPERS' relentless efforts since 2016 to force ExxonMobil to reduce its carbon footprint, which would effectively require it to reduce the amount of oil and gas it produces. Most recently, CalPERS, acting as an activist shareholder, campaigned to vote against Exxon’s board of directors in retaliation for the company filing a lawsuit against activists groups repeatedly pushing climate-related shareholder proposals. The campaign ultimately failed to oust the board. 

A spokesperson for Climate Action 100+ told Just the News that the report misrepresents the group’s actions and that investors engaging in “investor stewardship on climate change” are doing a service for their clients and beneficiaries. 

“Climate risk is a material financial risk. Institutional investors are well-served by acting on these risks and the resulting investment opportunities. If left unchecked, these risks threaten investors’ long-term ability to sustain value and generate ongoing returns for their beneficiaries,” the Climate Action 100+ spokesperson said. 

A spokesperson for CalPERS also claimed that climate change poses one of the greatest financial risks to long-term investors. “We are proud to participate in initiatives like Climate Action 100+ to help foster conversations with companies about ways to improve shareholder value. This is not collusion; it is collaboration. Every vote that we cast, and every engagement decision that we make, is based on a single North Star: what is best for the long-term returns for California's public servants,” the CalPERS spokesperson said. 

Ceres did not respond to requests for comment on the report. 

The report notes that soon after the Judiciary Committee launched its investigation into what the report calls “anti-competitive collusion,” Blackrock, State Street and J.P. Morgan Asset Management withdrew nearly $14 trillion of total assets under management from Climate Action 100+. Since then, the report notes, dozens of other members have left the group. 

“Despite the recent defections of a number of its members, including its largest asset managers, Climate Action 100+ remains a formidable force and a continuing threat to the welfare of American consumers,” the report charges. 

The Climate Action 100+ spokesperson disputed that characterization, and said that in recent weeks, 45 asset owners reaffirmed their support for the group. Likewise, those that have departed, the spokesperson said, have all stated they remain committed to climate action. 

The House Judiciary Subcommittee on the Administrative State, Regulatory Reform, and Antitrust will hold a hearing Wednesday to examine if current antitrust laws are sufficient to deter anti-competitive collusion used to promote ESG-related goals in the investment industry.  Representatives from CalPERS and Ceres are scheduled to testify. 

While the groups under scrutiny argue that climate change poses a risk and addressing that risk is wise investing, Hageman said these goals are ultimately harmful to consumers. 

“The concept of ‘net zero’ is a fantasy of radical climate zealots and government bureaucrats seeking to control our lives. The world will not only continue to need fossil fuels for generations to come, the need is only increasing. The sooner that the evil intentions of ESG policies are exposed and stopped, the sooner we can return to energy independence, lower inflation, and affordable living,” Hageman said.