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House Committee Subpoenas Vanguard and Arjuna Capital in Antitrust Probe

 |  December 11, 2023

The House Judiciary Committee issued subpoenas on Monday to The Vanguard Group and Arjuna Capital. The move comes amid concerns that the investment firms’ environmental, social, and governance (ESG) policies may be in violation of antitrust laws, reported CNBC.

Vanguard and Arjuna, known for offering funds focused on environmentally friendly businesses, have been accused of insufficiently providing documentation regarding their ESG policies. Committee Chairman Rep. Jim Jordan (R-Ohio) has requested documents and communications from both firms pertaining to how they “advance ESG policies.”

In letters addressed to the firms, Jordan expressed concerns that Vanguard and Arjuna might have entered into collusive agreements to ‘decarbonize’ their assets under management, potentially violating U.S. antitrust laws.

Both companies were previously members of Climate Action 100+, a coalition comprising about 700 global investors with assets exceeding $68 trillion. They were also participants in the Net Zero Asset Managers Initiative. Although Vanguard left both coalitions in December 2022, the committee continued its investigation.

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Despite submitting thousands of pages of records in response to an initial request in July, Vanguard and Arjuna’s efforts were deemed “inadequate” by Chairman Jordan.

The subpoenas are part of a broader investigation into whether coalitions like Climate Action 100+ violate antitrust laws by allegedly limiting investment opportunities in traditional industries, such as oil and gas.

In a letter dated July 6, Jordan accused ESG-informed investment decisions of potentially limiting output, increasing prices, and depriving businesses of investments and consumers of choices. He emphasized the far-reaching consequences for American freedom and economic well-being.

Notably, the Judiciary Committee has requested ESG-related documents from at least two dozen organizations, including BlackRock and State Street, since launching its “antitrust” probe in December 2022. The investigation aims to scrutinize the impact of ESG policies on market competition and investor choices.

Source: CNBC