Federal Trade Commission Chairwoman Lina Khan said large corporations offer environmental or diversity concessions to avoid antitrust enforcement but that her agency rejects such deals.
When asked during a Tuesday appearance before the Senate Judiciary Committee by Sen. Tom Cotton (R-AR) about whether large companies, such as the giant investment manager BlackRock, run afoul of anti-collusion laws by pursuing environmental, social, and governance goals, Khan said ESG played no pertinent role in stopping antitrust breakups.
“To the contrary, we’ve seen firms come to us and try to claim an ESG exemption, and we’ve had to come to them and explain clearly that there is no such thing,” Khan said. She did not identify which companies attempted to do so.
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When asked if ESG coordination among firms could violate the Sherman Act, which bans collusion by companies, Khan said she would need to look into such topics in more detail before commenting but said the subject was of interest.
Nineteen GOP attorneys general warned BlackRock CEO Larry Fink in August about the money manager’s commitment to ESG principles. They claimed BlackRock’s pursuit of environmental and social goals undercut shareholder profits in managing state pension funds.
The company responded by noting that climate change was a significant risk. “Governments representing over 90% of global GDP have committed to move to net-zero in the coming decades,” said Dalia Blass, BlackRock’s head of external affairs. “We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes. These opportunities cut across the political spectrum.”
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ESG, a focus on pursuing environmental or social justice goals in corporate policymaking, has been a target of criticism by Republicans, such as Indiana Attorney General Todd Rokita, who described it as an expression of the “leftward drift of corporate America.”
