Chairman Jordan Subpoenas As You Sow and GFANZ in ESG Investigation

Letter

Dear Mr. Bloomberg and Ms. Schapiro:

The Committee on the Judiciary is conducting oversight of the adequacy and enforcement
of U.S. antitrust laws.1 We write because the Glasgow Financial Alliance for Net Zero (GFANZ)
and the Net Zero Asset Managers initiative (NZAM) are potentially violating U.S. antitrust law
by coordinating their members' agreements to "decarbonize" their assets under management and
reduce emissions to net zero--with potentially harmful effects on Americans' freedom and
economic well-being. Accordingly, to advance our oversight and inform potential legislative
reforms, we write to ask GFANZ and NZAM to produce relevant documents and information.

Founded in 2021, GFANZ "is the world's largest coalition of financial institutions
committed to transitioning the global economy to net-zero greenhouse gas emissions."2 The
coalition boasts that it works "to expand the number of net zero-committed financial institutions
and to establish a forum for addressing sector-wide challenges associated with the net-zero
transition, helping to ensure high levels of ambition are met with credible action."3 Its members
include more than 550 financial sector firms that have "committed to the goal of net zero by
2050," and GFANZ acknowledges that it "[c]oordinate[s] commitments and actions across the
sector."4

1 See generally Rules of the House of Representatives R. X (2023).
2 GFANZ, ABOUT US, https://www.gfanzero.com/about/.
3 Id.
4 Id.

The Honorable Michael R. Bloomberg
The Honorable Mary L. Schapiro
July 6, 2023
Page 2

NZAM is one of the seven sector-specific alliances that comprise GFANZ. 5 NZAM was
launched in 2020 "to support[] the goal of net zero greenhouse gas emissions by 2050 or
sooner . . . and to support[] investing aligned with net zero emissions by 2050 or sooner."6
Its members include more than 300 asset managers with more than $59 trillion in assets under
management.7

GFANZ and NZAM coordinate agreements among their members to "decarbonize" their
assets under management and reduce emissions to net zero by 2050.8 Reaching net zero would require draconian "declines in the use of coal, oil and gas": as much as 98% for coal,9
94% for oil, and 86% for fossil fuels overall.10 This, in turn, would require radical "steps such as halting sales of new internal combustion engine passenger cars by 2035, and phasing out all unabated coal and oil power plants by 2040." 11 It also would mean "that no new oil and gas fields must be developed," choking off investment in these industries.12 Such restrictions limit output and
increase prices, and deprive businesses of investments and consumers of choices. The potential
consequences for American freedom and economic well-being are far-reaching.

Collusive agreements harm competition and consumers and are illegal under the Sherman
Act.13 Horizontal output restrictions are per se illegal, 14 but "the types of conduct banned" are
not limited to "regulat[ing] prices . . . or limit[ing] production."15 Rather, any "[c]oercive activity
that prevents its victims from making free choices between market alternatives is inherently
destructive of competitive conditions and may be condemned."16 This holds true whether or not
there is "an effect on prices" 17 because "all elements of a bargain--quality, service, safety, and
durability--and not just the immediate cost, are favorably affected by the free opportunity to

5 See id.
6 NZAM, HOME, https://www.netzeroassetmanagers.org/.
7 NZAM, SIGNATORIES, https://www.netzeroassetmanagers.org/signatories/.
8 See NZAM, COMMITMENT, https://www.netzeroassetmanagers.org/commitment/ ("[M]y organisation commits to . . . [w]ork in partnership with asset owner clients on decarbonisation goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management[.]").
9 See INTERNATIONAL ENERGY AGENCY, NET ZERO BY 2050: A ROADMAP FOR THE GLOBAL ENERGY SECTOR (May 2021), https://www.iea.org/reports/net-zero-by-2050.
10 See STATE OF CALIFORNIA, CALIFORNIA RELEASES WORLD'S FIRST PLAN TO ACHIEVE NET ZERO CARBON POLLUTION (Nov. 16, 2022), https://www.gov.ca.gov/2022/11/16/california-releases-worlds-first-plan-to-achievenet-zero-carbon-pollution/; see also INTERNATIONAL ENERGY AGENCY, supra note 9 (Fossil fuels must "fall from almost four-fifths of total energy supply today to slightly over one-fifth by 2050.").
11 INTERNATIONAL ENERGY AGENCY, supra note 9.
12 NET-ZERO ASSET OWNER ALLIANCE, NET-ZERO ASSET OWNER ALLIANCE SETS EXPECTATIONS FOR OIL AND GAS INVESTMENTS AND CALLS ON COMPANIES AND POLICYMAKERS TO ALIGN WITH 1.5C PATHWAYS (Mar. 29, 2023), https://www.unepfi.org/industries/net-zero-asset-owner-alliance-outlines-new-guidance-for-oil-and-gasinvestments-while-calling-on-companies-policymakers-and-investors-to-align-with-1-5c-pathways/.
13 See 15 U.S.C. § 1.
14 See NCAA v. Bd. of Regents, 468 U.S. 85, 104 (1984).
15 Fashion Originators' Guild of Am. v. FTC, 312 U.S. 457 (1941).
16 Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 528 (1983).
17 Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 213 n.7 (1959).

The Honorable Michael R. Bloomberg
The Honorable Mary L. Schapiro
July 6, 2023
Page 3

select among alternative offers."18 Moreover, as the Supreme Court has explained, "[t]he social
justifications proffered for [the] restraint of trade" cannot redeem anticompetitive collusion.19

Accordingly, to help the Committee better understand GFANZ's and NZAM's roles in
coordinating agreements among their members to "decarbonize" assets under management and
reduce emissions to net zero, please produce, for the period from January 1, 2020, to the present:

1. All documents and communications referring or relating to the creation, mission,
goals, or founding of GFANZ and NZAM, including the need for GFANZ or NZAM
to facilitate advancing decarbonization and net zero emissions goals;

2. All documents and communications referring or relating to how GFANZ and NZAM
developed their decarbonization and net zero emissions targets and commitments,
including what actions should be taken to achieve these targets and commitments, or
those developed by other alliances and initiatives such as Climate Action 100+;

3. All documents and communications referring or relating to any agreement or
commitment, or any effort to reach such an agreement or commitment, between
GFANZ or NZAM and any of their members, or among any of their members, to
advance decarbonization and net zero emissions goals, including but not limited to
documents and communications referring or relating to any member's or prospective
member's knowledge or awareness of another's agreement or commitment, and
documents and communications reflecting or suggesting agreement or commitment as
to specific steps, policies, or best practices;

4. All documents and communications referring or relating to how asset managers,
including but not limited to BlackRock, State Street Global Advisors, Arjuna Capital,
and Trillium Asset Management, can or should advance decarbonization and net zero
emissions goals, including but not limited to through setting investment policies,
making investment decisions, and sponsoring, supporting, opposing, or voting for
directors and stockholder proposals;

5. All documents and communications referring or relating to how proxy advisors,
including but not limited to Institutional Shareholder Services and Glass Lewis, and
stockholder engagement service providers, including but not limited to As You Sow,
Seventh Generation Interfaith, and the Shareholder Associate for Research &
Education, can or should advance decarbonization and net zero emissions goals,
including but not limited to through sponsoring, supporting, opposing, or voting for
directors and stockholder proposals;

18 Nat'l Soc. of Pro. Engineers v. United States, 435 U.S. 679, 695 (1978).
19 FTC v. Superior Ct. Trial Laws. Ass'n, 493 U.S. 411, 424 (1990).

The Honorable Michael R. Bloomberg
The Honorable Mary L. Schapiro
July 6, 2023
Page 4

6. All documents and communications referring or relating to how GFANZ or NZAM
monitor and enforce their members' decarbonization and net zero emissions
agreements and commitments; and

7. All documents and communications referring or relating to how GFANZ's, NZAM's,
or their members' decarbonization and net zero emissions goals, agreements, and
commitments affect output, price, or the choices available to consumers and
investors, including but not limited to the markets for fossil fuels such as coal, gas,
and oil.

Please produce the requested information as soon as possible, but no later than 5:00 p.m.
EDT on July 20, 2023.

Furthermore, this letter serves as a formal request to preserve all existing and future
records and materials relating to the topics addressed in this letter. You should construe this
preservation notice as an instruction to take all reasonable steps to prevent the destruction or
alteration, whether intentionally or negligently, of all documents, communications, and other
information, including electronic information and metadata, that are or may be responsive to this
congressional inquiry. This instruction includes all electronic messages sent using your official
and personal accounts or devices, including records created using text messages, phone-based
message applications, or encryption software.

If you have any questions about this request, please contact Committee staff at (202) 225-
6906. Thank you in advance for your prompt attention to this matter.

Sincerely,

Source