A high-profile legal dispute between 11 state attorneys general and three of the world's largest institutional investors will focus on so-called corporate environmentalism and its potential abuse for monetary gain. The lengthy complaint alleges that these overly powerful asset managers manipulated investment policies related to environmental, social, and governance (ESG) practices to spike coal prices and increase profits at the expense of consumers forced to pay more for electricity. It may be that ESG itself will be on trial.
An Antitrust Complaint
The complaint alleges that the gargantuan firms BlackRock, Vanguard Group, and State Street Corporation conspired to buy up substantial shareholding interests in America’s largest coal-producing companies to influence their policies to cut coal production. This was augmented by their involvement in outside environmental groups, which were used similarly to pressure reductions in the output that drove up costs for consumers. The idea that corporations might “invest” in pseudo-environmental initiatives that are counterproductive to the ecosystem but enhance profits is a central focus of those concerned by the apparent corporate eagerness to become moral leaders of the world.
The exploitation of climate fears for profit and power has increasingly gained attention in renewable energy manufacturing. Some consumers and regulators have become more aware of the astronomical externalized costs of toxins and fossil fuel consumption required to manufacture “goods” marketed for supposed public benefit. Contrast the advertised necessities of greenhouse gas reduction with lithium and cobalt mining, the coal plants, the long list of forever chemicals attendant to their production, and the planet-saving messaging centered around “net-zero” renewables falls flat. These products are not toxin-neutral, even if they are carbon-negative.
A tangential concern is posed by the lawsuit against the three big firms. They claim they are being wrongly targeted and maintain they focus on earning profits for both corporations and retirees (who invest in their funds). Still, if the allegations in the complaint are true, they were also investing directly in climate action groups. How exactly does that enhance profitability or client returns, if not motivated as these attorneys general allege? Crying victim by saying they would never undermine the profits of the companies they own by curtailing production ignores the improvements in price hikes and profit margins that accompany production cuts.
Environmental Lawfare?
Ironically, Democrats who curse corporate profits tend to embrace those same incorporated actors to rescue humanity from climate change and carbon dioxide. The Democrats who malign cows and object to the repeal of the Chevron deference seemingly wish to target corporations to pay more taxes while extending greater power and regulatory capture to these same entities. This is a vicious cycle that makes the ecosystem a plaything of political profiteering.
As reported by Just the News:
“The lawsuit … alleges the firms conspired to artificially constrict the market for coal through anti-trade practices. … This gave them influence over the policies of these companies, and they used their combined influence to pressure coal companies to adopt emissions-reductions goals and reduce coal output by more than half by 2030.”
Though protesting their innocence, the corporate defendants face difficult scrutiny. Corporations are almost universally in business to expand production and market share, not self-limit their products by clamoring for reduced production goals. However, restricting supply to boost demand is a classic economic gambit to spike prices and profit margins. Indeed, coal companies that cut output but double prices could become more profitable on reduced gross revenue in the (supposedly) climate-saving bargain.
Conspiracy Against the Public?
Corporate ESG ethics raise thorny questions about conflicts of laws. In the blind rush to reduce greenhouse gases, forever chemicals are being generated at a record pace, and free speech liberties are quashed in the name of an alleged “climate emergency.” If free speech is to be sacrificed on the altar of climate alarmism, and children’s bodies are tainted with PFAS and endocrine disruptors to stave off global warming, then perhaps antitrust laws and economic protections of electricity ratepayers will be similarly thrown to the climate-doom dogs.
Americans are increasingly asked to sacrifice the rule of law and their basic constitutional liberties in the name of “saving the world” from an existential end-of-the-world “consensus.” Will climate-change activists assert that higher electric rates for consumers and the erosion of longstanding antitrust protections are the price that must be paid to liberate victimized investment funds (managing an estimated $26 trillion in assets) so they may save the world from coal and carbon for unprecedented profits? Or perhaps this is corporate fraud on a never-before-seen scale.
Time will tell. Should this case reach a jury’s consideration, some of those ratepayers will sit in judgment on corporate stakeholders and decide whether this alleged behavior was a rescue of humanity by philanthropic investors or a cynical exploitation of the environment to tap into ratepayers’ pocketbooks.
