Many anxiously watching the anti-ESG movement are asking “will anti-ESG win?” Primarily this is in relation to antitrust enforcement and analyses like the Sabin Center piece we discussed previously. That article is fascinating and a useful breakdown of the finer points of antitrust law and its application in this context. However, I believe legal commenters have become too preoccupied with the question of whether antitrust cases are viable which distracts from practical effects that anti-ESG is having.
The Net-Zero Insurance Alliance (NZIA), a UN-backed program aimed at reducing greenhouse gas emissions in underwriting portfolios, has lost nearly half its members due to anti-ESG efforts. Vanguard withdrew from the Net Zero Asset Managers (NZAM) after being targeted by the state of Texas as potentially “boycotting energy companies”. BlackRock – once a loud and proud champion of ESG – no longer uses the term. That action alone reverberated through the halls of corporate America (perhaps not a great metaphor in today’s WFH world).
Anti-ESG doesn’t have to win in the courtroom to win in the boardroom. The perception of risk is enough to influence behaviors even if that risk is illusory. I’m not saying that every antitrust case in ESG is without merit – if they weren’t then we probably wouldn’t see authorities in the EU and UK making ESG carveouts in their antitrust laws. Even so, merit is a secondary issue – the primary issue is winning the rhetorical battle, delaying and frustrating ESG professionals, and moving companies away from ESG. Even those who helped move the needle to begin with.
