ESG-related unilateral conduct and collaborations are subject to scrutiny under existing long-standing federal and state antitrust laws in the United States.

We do not foresee new antitrust laws/regulations specific to ESG coming into place in 2022.  However, the Federal Trade Commission ("FTC") is expected to update its so-called Green Guide in the coming months. The Green Guide provides guidance to businesses related to the 1) general principles that apply to all environmental marketing claims; 2) how consumers are likely to interpret particular claims and how marketers can substantiate these claims; and 3) how marketers can qualify their claims to avoid deceiving consumers. The FTC last updated the Green Guide in 2012.

U.S. regulators have not issued guidance specific to ESG in the context of either merger or conducting antitrust analysis.  However, public comments by senior antitrust officials in the U.S. Department of Justice shed some light on their views of the interconnection between ESG and antitrust law. One commented in a confirmation that ESG issues should not be a consideration in merger analysis unless they impact competition. Another published an op-ed in the wake of opening an investigation into emissions standards agreed upon between the State of California and automakers asserting that even the “loftiest of purported motivations do not excuse anti-competitive collusion among rivals.”  Various State Attorneys General also have made public statements expressing concern about ESG-related coordination. For example, the Arizona State Attorney General described ESG as the “biggest antitrust violation in history” in an opinion piece in the Wall Street Journal and has launched an investigation into alleged coordination against businesses in the energy sector.

While antitrust regulators in the United States have not issued guidance specific to ESG, practitioners can look to the Antitrust Guidelines for Collaborations Among Competitors, consent decrees, and other public pronouncements for guidance on how the U.S. Department of Justice and FTC are expected to analyze codes of conduct, standard setting, information sharing, joint purchasing, and other collective conduct.

Mechanisms exist for obtaining formal and informal guidance from antitrust regulators in the United States. For example, parties may request a business review letter from the Antitrust Division of the U.S. Department of Justice.  However, the limited resources of the agencies may prevent the parties from obtaining a timely response.

The agencies have not issued guidance related to the quantification or calculation of ESG effects. On the other hand, public reports suggest that FTC staff have begun seeking information related to ESG in connection with their investigations of certain mergers.

Antitrust regulators in the United States are unlikely to challenge unilateral conduct related to ESG or collaborations to identify ESG best practices, establish voluntary codes of conduct, develop technology standards, or lobby federal and state governments. Rather, their focus will be on hard-core cartel conduct and efforts to exclude rivals or make them less efficient. ESG collaborations that impose undue burdens on labor markets or negatively impact workers, small and minority-owned businesses (including farms and ranches), and local, rural, and low-income communities also are likely to receive attention.

While several investigations of alleged collective anticompetitive conduct have been launched in recent years, they have not resulted in litigation or court precedents.

Class action antitrust litigation is common in the United States. However, to date, ESG-related class action litigation generally has been initiated based on alleged violations of environmental and securities laws and regulations rather than federal and state antitrust laws. Consumer class actions challenging alleged false and deceptive advertising and other so-called green-washing claims by businesses also are on the rise. These consumer protection claims likewise do not hinge on federal or state antitrust laws, but rather are grounded in state unfair trade practices and unfair competition laws.