House Judiciary Republicans Pursue ‘Climate Cartel’ Based on Antitrust Accusations

A new front in the war on environment, social and governance (ESG) opened this month when Republicans on the House Judiciary Committee released a report accusing left-wing environmental activists and major financial institutions of colluding to force U.S. companies to adopt the policies anti-fossil fuels.

Following the report, GOP committee members organized a subcommittee hearing last Wednesday, during which they questioned representatives of some institutions they accuse of being part of a “climate cartel” that violates antitrust laws, which witnesses deny.

Rep. Thomas Massie, R-Ky., chairman of the antitrust, commercial and administrative law subcommittee, said this “climate cartel” clearly requires investors who join it to pressure the companies they invest in to achieve net-zero emissions and adopted their desired leftist policies.

Massie said asset owners and managers then use the investments they control to force companies to disclose greenhouse gas emissions and adopt governance mechanisms that enforce climate commitments, even if they disadvantage investors and consumers.

“The climate cartel is using a series of escalating pressure tactics to force U.S. companies to act against their own interests and adopt desired leftist policies,” Massie said.

Companies that resist this pressure, Massie added, are targeted by shareholder resolutions demanding they take the actions the “climate cartel expects of them.”

As an example, he cited the successful 2021 efforts of the anti-fossil fuel activist group Engine No. 1 aimed at replacing three members of ExxonMobil’s management board.

This amounts to anti-competitive collusion, according to Massie, aimed at reducing the number of flights Americans take, getting Americans to reduce their beef consumption and keeping fossil fuels in the ground.

Rep. J. Luis Correa, D-Calif., ranking member of the subcommittee, called the accusations “an attack on shareholders.” He argued that shareholders own the company and have the right to hold the corporations in which they invest accountable.

“It’s called free enterprise. We should encourage it to be a pro-competitive, pro-democratic and pro-free market,” Correa said.

The witnesses included a representative from the California Public Employees Retirement System, or CalPERS, which oversees $485.8 billion in investments, and Arjuna Capital, which manages $500 million in assets, according to managing partner Natasha Lamb.

Witnesses argued that what is called collusion is simply groups of investors and managers sharing information and collaborating.

Mindy Lubber, CEO of Ceres, described the work of the nonprofit she chairs as working “with investors and companies to make the business case for action when solving some of the biggest global financial challenges facing our world today, such as climate, water shortages and pollution.

Therefore, she argued, managing this risk is their fiduciary responsibility.

Urge and coordinate

Ceres, which has more than 200 member investors and $44 trillion in assets under management, was the focus of a 2023 report from Consumers’ Research, a nonprofit consumer advocacy organization. The report accused Ceres of being a “global pressure group” whose mission is to “incite and coordinate members of the financial industry to push harmful, anti-consumer ‘net zero’ goals at every large public company in the country.”

The group is calling on the Judiciary Committee to investigate Ceres for collusion. said Will Hild, executive director of Consumers’ Research Only News the audition was encouraging.

“We are extremely pleased that the House Committee has taken up this matter. We think this is an extremely important area to explore,” Hild said.

Hild also questions the witnesses’ characterization of their actions as merely a matter of cooperation between colleagues. He said they meet to reward and punish companies depending on how well they follow their agenda.

“When you’re talking about financial services companies that have a large portion of market share and they collude in the market to take advantage of their market share, that’s called an antitrust conspiracy,” Hild said.

Focus companies

As for the impact on consumers, Republicans on the subcommittee questioned witnesses about whether their goal is to get oil companies to reduce the amount of oil and gas they produce.

Rep. Harriet Hageman of Wyo. stated that what witnesses described as “engagement” “aims to fundamentally change businesses and industries to the detriment of consumers.” This makes these actions not cooperation, but collusion, she said.

Hageman said that over the last 100 years, the modern world has witnessed “staggering” technological advances that have resulted in increased life expectancy and low infant mortality rates.

“There is one reason why over the last 100 years we have seen the prosperity that has brought this. It has never had any equal in the history of the world. This is due to the commercial production of cheap energy. Each of you and your organizations want to destroy it. You are evil and what you are trying to do and the violations of law you are involved in is absolutely stunning,” Hageman said.

Hageman asked Dan Bienvenue, CalPERS’ interim chief investment officer, about the goals of Climate Action 100+, an investor group of more than 700 investors and 170 companies that CalPERS helped found.

As it explains on its website, the 100+ Climate Action includes 170 companies it considers “key to driving the global transformation to net zero emissions.” It focuses on these companies because of their “engagement,” and 42 of them are oil and gas producers.

Hageman cited statements made in congressional testimony and testimony from leaders of various groups that the committee’s report calls the “climate cartel.” These statements explain that net zero emissions targets require fossil fuel companies to reduce or eliminate production.

“One of the goals of Climate Action 100 is to reduce emissions by these focused companies. Is that correct?” Hageman asked.

“Climate change is something that’s happening,” Bienvenue replied, and Hageman repeated the question. Bienvenue said the goal of Climate Action 100 is to get companies to reduce emissions.

Hageman asked Lubber if Ceres and Climate Action targeted the livestock industry as an industry that needs to reduce emissions, which she believed would require them to reduce beef production.

“There are ways to farm and produce energy with lower greenhouse gas emissions. A lot of the oil and gas companies you talked about, it’s not about not producing. It’s about creating options and transforming technology,” Lubber replied.

Seismic shift

Hild said witnesses’ claims that climate change is a risk and that addressing that risk is part of their fiduciary responsibility ignore many other risks associated with reducing emissions.

“They seem to think this is the only risk in the world. I don’t hear them complaining about supply chain risks in China. If we ever find ourselves in a hot or lukewarm conflict with them again, or even in a cold economic conflict, that will pose a risk,” Hild said, adding that these pressure groups exist solely to push a progressive far-left agenda.

Hild said opposition to ESG efforts has an impact, but said it needs to be measured with balance. Consumers contacting elected officials are undergoing a “seismic shift,” he said, and they shouldn’t feel like they can’t stand up to big Wall Street firms.

But Hild said ESG advocates are maneuvering to advance their agenda as part of a “much quieter conspiracy.” Much effort has been made at the state level, where legislatures have passed anti-ESG measures. But Hild added that ESG companies are now promising to provide more investment capital to these states if they simply stop their anti-ESG efforts.

“We cannot take our foot off the gas pedal and assume we have achieved final victory,” Hild said. “We should be absolutely encouraged by the fact that the dynamics have changed in our direction. We just need to end this fight so that our markets continue to be rigged with this type of disgusting, collusive behavior that is anti-consumer and contributes to inflation.”