House panel subpoenas Vanguard, Arjuna in ESG ‘collusion’ probe

WASHINGTON — A House panel subpoenaed Vanguard Group and Arjuna Capital on Monday, the latest move in its work. Throughout the year Conduct an investigation into whether the environmental, social and governance policies of investment funds violate antitrust laws.

Vanguard and Arjuna are two investment companies that offer some funds that focus on green businesses. The House of Representatives says that the two companies did not provide sufficient documentation about their policies.

The Judiciary Committee wants documents and communications from investment firms related to how they “advance their environmental, social and governance policies,” according to letters from committee chairman Rep. Jim Jordan (R-Ohio).

In each of the letters, Jordan wrote that the company “appears to have entered into collusive agreements to decarbonize its assets under management and reduce emissions to net zero in ways that may violate U.S. antitrust law.”

Arjuna and Vanguard were part of Climate Action 100+, a coalition of about 700 global investors representing more than $68 trillion in assets, according to the group. They also participated in the Net Asset Managers Initiative. Vanguard withdrew from both coalitions in December 2022, but that did not stop the committee.

Vanguard and Arjuna have already submitted thousands of pages of records to the committee, following an initial request in July. Vanguard alone sent 3,619 documents, according to the committee’s count.

However, Jordan wrote to each company that their “response without mandatory action was insufficient.”

The subpoenas form part of a larger investigation into whether coalitions like Climate Action 100+ are violating antitrust laws because they deprive investors of the opportunity to invest more heavily in oil and gas.

in Letter of July 6 Jordan also claimed, for Vanguard, that ESG-informed investment decisions “reduce production and increase prices, depriving companies of investments and consumers of choices.”

“The potential consequences for American freedom and economic well-being are far-reaching,” he added.

At least two dozen organizations, including BlackRock and State Street, have received requests from the Judiciary Committee for ESG-related documents since the committee launched its antitrust investigation in December 2022.