A number of conservative politicians and legal scholars have been advancing, for more than a year, theories that decisions made by companies to adhere to certain sustainability standards or ESG principles promulgated by third-party groups would violate antitrust law.  In particular, a letter issued by certain Republican Senators in fall 2022 brought attention to this issue, which was later echoed by House Republicans, who further exercised their authority to demand documents from major American financial institutions.  The emphasis on antitrust law as a potential counter to the broader ESG movement has featured prominently in the federal government.

Now, as highlighted in the below article, it seems that there is a significant impetus for action by state government as well.  Specifically, “[s]tate attorneys general [] appear to be preparing for action, hiring two outside law firms to lead the investigation and potential litigation that . . . could come in the next year.”  The shift in emphasis to state government may reflect the fact that Republican anti-ESG initiatives at the federal level have been stymied by the Biden Administration.  Alternatively, it may be the considered judgment of activists that antitrust action by state attorneys-general may simply be more effective; there have been a number of state-level antitrust investigations and litigations launched in the past few years. 

Regardless, it is quite clear that the intersection of ESG principles and antitrust law remains a major focus for the anti-ESG movement, and will likely feature in legal activity designed to counter ESG initiatives. 

The conservative backlash against corporate sustainability initiatives is expected to pick up steam ahead of next year’s elections, leaving Wall Street firms and others looking for government guidance to navigate the narrow path through a political minefield. Financial services companies, in particular, have been spooked by red-state officials’ threats to file antitrust lawsuits over collaborative net-zero commitments they have made through groups such as the Net-Zero Insurance Alliance and the Net-Zero Banking Alliance... State attorneys general, meanwhile, appear to be preparing for action, hiring two outside law firms to lead the investigation and potential litigation that, according to a source familiar with internal discussions, could come in the next year.