Chairman Jordan Subpoenas As You Sow In ESG Investigation
Letter
Dear Mr. Cameron:
The Committee on the Judiciary is conducting oversight of the adequacy and enforcement
of U.S. antitrust laws. 1 We write because Glass, Lewis & Co. (Glass Lewis) is potentially
violating U.S. antitrust law by entering into agreements to "decarbonize" corporations 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 Glass Lewis to produce relevant documents and information.
Glass Lewis is the world's second-largest proxy advisory firm, with contractual
relationships with mutual funds controlling $23.6 trillion in assets and at least a 44% market
share as of 2021.2 Together with Institutional Shareholder Services Inc., Glass Lewis forms half
of the duopoly that controls a combined 91% of the market for proxy advisor services.3
Glass Lewis appears to have colluded with institutional investors to force American
corporations to "decarbonize" their assets and reduce their emissions to net zero. "Glass Lewis
believes it is important for companies to effectively oversee and manage material environmental,
social, and governance (ESG) issues," and that climate change "should be addressed and
considered by companies in every industry."4 Accordingly, Glass Lewis recommends voting
against incumbent directors at "companies identified by groups including Climate Action 100+"
unless the company "provide[s] clear and comprehensive . . . climate-related disclosures,"
including of "the impact of a lower carbon future on the company's operations," and implements
1 See generally Rules of the House of Representatives R. X (2023).
2 Chong Shu, The Proxy Advisory Industry: Influencing and Being Influenced 10, USC MARSHALL SCHOOL OF BUSINESS RESEARCH PAPER (June 8, 2023).
3 See id. at i, 10.
4 GLASS LEWIS, ENVIRONMENTAL, SOCIAL & GOVERNANCE ("ESG") INITIATIVES 1--2 (2020).
Mr. Kevin Cameron
August 1, 2023
Page 2
"explicit and clearly defined oversight responsibilities for climate-related issues."5 Climate
Action 100+, in turn, "work[s] with the companies in which [its members] invest to . . . deliver[]
net zero [greenhouse gas (GHG)] emissions by 2050."6
Reaching net zero would require draconian "declines in the use of coal, oil and gas": as
much as 98% for coal,7 94% for oil, and 86% for fossil fuels overall.8 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."9 It also would mean "that
no new oil and gas fields must be developed," choking off investment in these industries.10 Such
restrictions limit output and increase prices, and deprive businesses of investments and consumers of choices. The potential consequences for American freedom and economic wellbeing are far-reaching.
Collusive agreements harm competition and consumers and are illegal under the Sherman
Act.11 Horizontal output restrictions are per se illegal, 12 but "the types of conduct banned" are
not limited to "regulat[ing] prices . . . or limit[ing] production."13 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."14 This holds true whether or not
there is "an effect on prices"15 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
select among alternative offers."16 Moreover, as the Supreme Court has explained, "[t]he social
justifications proffered for [the] restraint of trade" cannot redeem anticompetitive collusion.17
Accordingly, to help the Committee better understand Glass Lewis's role in entering into
agreements to "decarbonize" corporations and reduce emissions to net zero, please produce, for
the period from December 1, 2016, to the present:
5 GLASS LEWIS, 2023 POLICY GUIDELINES 31 (2022).
6 CLIMATE ACTION 100+, THE THREE GOALS, https://www.climateaction100.org/approach/the-three-goals/.
7 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.
8 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 7 (Fossil fuels must "fall from almost four-fifths of total energy supply today to slightly over one-fifth by 2050.").
9 INTERNATIONAL ENERGY AGENCY, supra note 7.
10 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/.
11 See 15 U.S.C. § 1.
12 See NCAA v. Bd. of Regents, 468 U.S. 85, 104 (1984).
13 Fashion Originators' Guild of Am. v. FTC, 312 U.S. 457 (1941).
14 Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 528 (1983).
15 Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 213 n.7 (1959).
16 Nat'l Soc. of Pro. Engineers v. United States, 435 U.S. 679, 695 (1978).
17 FTC v. Superior Ct. Trial Laws. Ass'n, 493 U.S. 411, 424 (1990).
Mr. Kevin Cameron
August 1, 2023
Page 3
1. All documents and communications referring or relating to the need for Glass Lewis
to advance decarbonization and net zero emissions goals;
2. All documents and communications referring or relating to how Glass Lewis
developed its decarbonization and net zero emissions targets and commitments,
including those targets and commitments developed by alliances or initiatives such as
Climate Action 100+ and the Net Zero Asset Managers initiative (NZAM);
3. All documents and communications referring or relating to how Glass Lewis and
other proxy advisors 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;
4. All documents and communications referring or relating to how 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 direct engagement, sponsoring, supporting, opposing, or voting for
directors and stockholder proposals;
5. 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;
6. All documents and communications referring or relating to any agreement or
commitment, or any effort to reach such an agreement or commitment, between or
among Glass Lewis, other proxy advisors, asset managers, stockholder engagement
service providers, and alliances or initiatives such as Climate Action 100+ and
NZAM or 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 of their 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; and
7. All documents and communications referring or relating to how Glass Lewis's
decarbonization and net zero emissions goals, agreements, and commitments,
including those goals, agreements, and commitments developed by alliances or
initiatives such as Climate Action 100+ and NZAM, 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.
Mr. Kevin Cameron
August 1, 2023
Page 4
Please produce the requested information as soon as possible, but no later than 5:00 p.m.
EDT on August 15, 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