House panel subpoenas Vanguard, Arjuna in ESG 'collusion' probe

WASHINGTON — A House panel subpoenaed The Vanguard Group and Arjuna Capital on Monday, the latest step in its yearlong investigation into whether investment funds' environmental, social and governance policies violate antitrust laws. 

Vanguard and Arjuna are investment firms that offer some funds focused on environmentally friendly businesses. The House says the two firms have not provided enough documentation on their policies.

The Judiciary Committee wants documents and communications from the investment firms related to how they "advance ESG policies," according to letters from committee Chairman Rep. Jim Jordan, R-Ohio.

In each of the letters, Jordan wrote that the firm, "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 is part of Climate Action 100+, a coalition of about 700 global investors that represent more than $68 trillion in assets, according to the group. Arjuna also participates in the Net Zero Asset Managers Initiative. Vanguard was in the initiative but left in December 2022, but that didn't stop the committee from including it in its investigation.

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.

Still, Jordan wrote to each firm that its "response without compulsory process has been inadequate."

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

In a July 6 letter to Vanguard, Jordan also alleged that ESG-informed investment decisions, "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," he added.

In response to a request for comment a Vanguard spokesman said the firm "is committed to working constructively with lawmakers and has cooperated with the Committee's requests, including producing tens of thousands of pages of relevant documents to date."

An Arjuna Capital spokeswoman said they "have responded and intend to fully comply with the House Judiciary Committee's request."

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

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Correction: Vanguard was in the Net Zero Asset Managers Initiative but left in December 2022. An earlier version misstated its status.