A recent decision in the Eastern District of Texas highlighted the risks for environmental, social, and governance (ESG) initiatives involving market competitors. The decision, when paired with recent enforcement efforts from Republican state attorneys general (AGs), is the latest indicator of the increased scrutiny faced by ESG joint ventures.

Background

Over the past decade, as concerns over climate change have increased, businesses, particularly public companies, have developed programs that consider more than the traditional profit motive. ESG programs are initiatives that companies implement to identify, manage, and report on risks and opportunities related to environmental, social, and governance factors. Driven largely by investor demand, ESG programs help businesses assess and disclose how issues such as climate change, resource use, labor practices, diversity, and corporate governance could impact their financial performance and long-term value. These programs are shaped by evolving regulations and reporting standards that require companies to be transparent about material environmental and social risks. Several joint initiatives have been launched, including Net Zero Asset Managers (NZAM) and Climate Action 100+ (CA100), which are the subject of an ongoing lawsuit led by the Texas Attorney General’s Office.

In Texas v. BlackRock, Inc., Texas and several other plaintiff states allege that three of the world’s largest asset management firms made substantial investments in nine publicly traded U.S. coal companies, collectively holding between 24.94 percent and 34.19 percent of shares in seven of these companies, and 10.85 percent and 8.30 percent in the remaining two. As some of the largest shareholders in these coal companies, the defendants allegedly used their significant stakes to coordinate efforts to constrain coal production through climate-related initiatives (NZAM and CA100) and shareholder actions, such as voting against board members and engaging with company leadership to promote reduced coal output. Plaintiffs claim these coordinated efforts constituted an illegal antitrust agreement and led to higher coal prices and lower production, violating federal antitrust laws. The defendants moved to dismiss the claims.

The essential question at issue was whether the asset management firms’ collective actions exercised through ownership interests in the coal companies and decision-making power constituted a plausible claim under Section 1 of the Sherman Act and Section 7 of the Clayton Act. The District Judge, a Trump appointee, answered in the affirmative. In denying defendants’ Motion to Dismiss, the court found that the asset management firms acquired a substantial amount of stock in the coal companies (between 24.94 percent and 34.19 percent) and joined climate initiatives requiring an artificial reduction in coal output. The Judge also found that the “investment-only” exemption to Section 7 did not apply because the states sufficiently alleged that asset management firms used their proxy voting power to restrict coal output. The court pointed to the firms’ “moral motive” to conspire, and the economic motive to profit from inflated coal prices.

Florida Attorney General Investigations into ESG and Climate Disclosure Organizations

Florida’s Attorney General opened two investigations in the past six months into perceived collusion between companies on ESG and DEI investing policies. In March 2025, the Florida AG announced an investigation into the investing policies of two leading proxy advisors, seeking to determine whether they colluded in urging asset managers to adopt ESG and DEI policies in violation of Florida’s Deceptive and Unfair Trade Practices Act or the Florida Antitrust Act of 1980.

Separately, on July 28, 2025, the Florida AG launched an investigation into the Climate Disclosure Project (CDP) and the Science Based Targets initiative (SBTi) for potential antitrust and consumer protection violations, specifically examining whether these organizations coerced companies into disclosing proprietary data and paying for access under the pretense of environmental transparency.

Nebraska Attorney General’s Lawsuit Against Truck Manufacturers

In November 2024, the Nebraska Attorney General filed an antitrust lawsuit against several major truck manufacturers, alleging that these companies participated in a multi-year agreement to fix prices, limit competition in the sale of medium and heavy-duty trucks, and collude to eliminate internal combustion engine vehicles from the market. The lawsuit asserted that the alleged conduct began in the mid-2000s and continued for over a decade, affecting truck sales in Nebraska and throughout the United States.

According to the complaint, the Attorney General alleges that the manufacturers exchanged non-public information regarding pricing, production, and sales volumes through regular meetings and communications, both directly and through trade associations. In addition, the complaint accuses the manufacturers of conspiring to align their business practices with California’s stringent climate standards, allegedly agreeing to phase out internal combustion engine vehicles in favor of zero-emission alternatives. The complaint claims that this information-sharing and coordination enabled the companies not only to fix prices and restrict supply, but also to limit consumer choice and accelerate the removal of traditional fuel-powered trucks from the market, resulting in higher prices for consumers and businesses.

The case reflects the state’s efforts to align antitrust enforcement with Trump administration policy. The lawsuit bore similarities to the 2019-20 federal investigation initiated during the first Trump administration into an agreement between major automakers and the State of California regarding vehicle emissions standards. Nebraska dismissed the lawsuit on August 11, 2025, after Congress issued joint resolutions of disapproval of the EPA’s waivers of pre-emption for California’s regulatory emissions standards.

Husch Blackwell Team Takeaways

ESG initiatives and collective efforts aimed at encouraging companies to pursue sustainability objectives face greater than ever visibility and antitrust scrutiny from federal and state enforcers. Clients seeking to maintain or establish public environmental and social initiatives must take careful steps to show that such programs are the product of a unilateral business decision. The Blackrock decision highlights the importance of retaining knowledgeable and experienced legal counsel. Although this enforcement trend will likely continue, much remains to be seen about how BlackRock will fare on summary judgment or in a trial on the merits, and how the Florida investigations will unfold.