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Compliance November 2, 2023
Judiciary Committee Targets Net-Zero and Decarbonization Nonprofit
House Republicans have ordered the CEO of As You Sow, a shareholder representative committed to reducing carbon emissions, to testify on December 1.
Reported by Paul Mulholland
The House Judiciary Committee has issued a subpoena to As You Sow—a nonprofit shareholder representative and climate action advocacy organization—and its CEO, Andrew Behar, seeking documents by December 1.
The subpoena served to As You Sow alleged that “corporations are collectively adopting and imposing left-wing environmental, social, and governance (ESG)-related goals, and the Committee is concerned that As You Sow appears to facilitate collusion that may violate U.S. antitrust law.”
The committee explained in the subpoena that it seeks documents and testimony from As You Sow to “understand how and to what extent As You Sow may facilitate collusion to promote ESG-related goals.”
The committee previously sent request-for-information letters to As You Sow and other organizations, such as proxy advisory service providers Glass, Lewis & Co. LLC and Institutional Shareholder Services Inc. in August. Requests were also sent to firms and advocates in the net-zero and decarbonization sectors, such as Ceres, a sustainability-focused nonprofit organization working on capital markets issues, and Aviva plc, a major insurance provider in the U.K.
Glass Lewis, Ceres and Aviva did not respond to a request for comment, and ISS declined to comment. PLANSPONSOR is owned by ISS.
The committee’s requests, which were broadly similar in each case, specified documents relating to: goals regarding climate change; how the groups arrived at those goals; communications related to shareholder proposals that promote decarbonization; communications with shareholder engagement service providers, such as As You Sow, on how to reduce emissions through shareholder actions; communications related to how asset managers can advance decarbonization; and how decarbonization goals impact consumers of “fossil fuels such as coal, gas, and oil.”
The subpoena issued Wednesday alleges that As You Sow was non-responsive to the August request.
Fugere says the subpoenas are “intended to reduce climate action” and that the committee has “not spelled out” what the antitrust violation would be in this case. Fugere argues that helping shareholders who want to take “climate into account” has “no anti-competitive impact whatsoever.”
Fugere adds that “there is no negative competitive impact or agreement,” because the nonprofit is not leveraging shareholder coordination to fix prices, split markets or undertake other anti-competitive behavior. She says many investors care a lot about environmental issues, and As You Sow represents their interests in communications with a public company and can assist them in the shareholder proposal and proxy voting process, adding that As You Sow doesn’t understand the committee’s claims and cannot comply with the document request due to its breadth.
