This post is part of Hub and Spoke series on Antitrust Rulebook Rewrites and Climate and Antitrust. You can find previous installments here: Anti-ESG Sentiment Spurs States to Test Horizontal Shareholding Antitrust Theory; Antitrust Enforcement and President Trump’s AI Action Plan; The Time Has Come to Regulate State Aid in the U.S.
Almost a year has passed since Texas Attorney General Ken Paxton filed suit alleging that BlackRock, State Street, and Vanguard’s participation in Environmental, Social, and Governance (ESG) initiatives violated the antitrust laws. As discussed in my earlier blog post, the case is significant as apparently the first direct challenge to horizontal shareholding. The past year the theory has gained traction as a tool to challenge ESG initiatives.
Last month, a federal judge declined to dismiss Paxton’s case. Throughout the late summer and into the fall, the State Attorneys General of Florida and Iowa advanced similar efforts challenging the legality of net-zero alliances, disclosure frameworks, and sustainability standards.
States are intensifying investigations into ESG initiatives, with 2026 expected to mark a record year for enforcement under antitrust and consumer protection laws. But companies involved in climate alliances or disclosure frameworks can address this scrutiny and mitigate legal risks by permitting voluntary, transparent participation, narrowly tailoring their efforts to specific goals, and clearly identifying the procompetitive effects of their efforts.
Texas v. BlackRock
In November 2024, eleven state attorneys general filed a complaint alleging that BlackRock, State Street, and Vanguard used their stockholding power in coal companies to reduce output in line with sustainable energy goals.[1] Plaintiffs claimed the firms violated Section 7 of the Clayton Act by leveraging their ownership stakes to influence coal production, and Section 1 of the Sherman Act by conspiring to restrict output and exchange competitively sensitive information.[2] The case is notable because it targets horizontal shareholding—ownership of minority stakes across competing firms—and seeks to impose antitrust liability on ESG-aligned conduct.
On August 1, 2025, the Eastern District of Texas ruled on Defendants’ motion to dismiss in Texas et al. v. BlackRock, Inc., et al., Case No. 6:24-cv-437-JDK.[3]
- Clayton Act: The Court held that Plaintiffs adequately alleged an acquisition within the statute, noting Defendants’ combined 23% ownership in most coal companies was sufficient to influence decision-making. Id. at 13–14. Plaintiffs’ allegations of coordinated climate commitments, public statements, and consistent voting patterns plausibly suggested conduct likely to lessen competition by reducing output and raising prices. Id. at 18–19.
- Sherman Act: The Court Found it was “a close call,” but held Plaintiffs plausibly alleged a conspiracy based on circumstantial evidence, including parallel timing of net-zero commitments and alleged agreements to pressure coal producers to disclose future production. Id. at 41–42. The Court applied the rule of reason and accepted allegations that coal output decreased and profits rose from 2019 to 2022 as sufficient to suggest anticompetitive effects. Id.
Because the Court deemed sufficient Plaintiffs’ allegations under Federal antitrust law, it also refused to dismiss Plaintiffs’ antitrust claims under state law. Id. at 47. Fact discovery is currently scheduled to occur throughout 2026, with a jury trial set for January 2028.[4]
This case has emboldened other states to follow suit.
Florida Investigates CDP and SBTi
Just days before the Texas ruling, on July 28, 2025, Florida Attorney General James Uthmeier announced an investigation into potential antitrust violations by the Climate Disclosure Project (CDP) and the Science Based Targets initiative (SBTi).[5]
The Attorney General issued subpoenas to examine whether CDP and SBTi:
- Coordinated with financial institutions and investment services in ways that could amount to unlawful market manipulation; and
- Pressured or punished non-participating companies in a manner that created anticompetitive effects.
Florida also identified possible deceptive trade practices, including:
- Selling services tied to better environmental scores or public endorsements;
- Creating incentives for corporations to pay for preferential treatment; and
- Misrepresenting the neutrality of environmental data provided to investors and consumers.
Because CDP and SBTi partner closely—CDP incorporates SBTi standards into its questionnaires—Florida’s probe highlights state concerns that ESG standard-setting organizations wield outsized influence over corporate conduct.
Iowa investigates SBTi
On August 8, 2025, the Iowa Attorney General sent a demand letter to SBTi, further extending scrutiny of climate disclosure and standard-setting organizations. The letter stated that engagement with SBTi is “no different” from participation in Climate Action 100+ or Net Zero Alliances, both of which feature prominently in the Texas litigation.[6]
The Iowa Attorney General raised concerns that “net zero programs are unrealistic and harm both American agriculture and industry,” increasing food costs and undermining energy independence. The letter focused on SBTi’s newly released Financial Institutions Net-Zero (FINZ) Standard (July 22, 2025), which requires financial institutions to:
- Adopt fossil fuel transition policies with clear steps and timelines for ceasing new financial activities and insurance services to the fossil fuel sector; and
- Transition financing portfolios to net-zero by 2050.
The Attorney General argued that these standards expose companies to antitrust liability (for allegedly colluding to restrict access to financing or insurance) and consumer protection liability (if companies fail to meet their commitments, potentially misleading consumers through “greenwashing”).
The letter requested extensive information, including:
- Communications between SBTi and its members about commitments and development of the FINZ Standard;
- Details on SBTi’s relationships with members and U.S. affiliates;
- Information on SBTi’s funding sources; and
- A list of insurers working within the SBTi framework to reduce emissions, including how participation influences their business practices.
Florida Targets the Consumer Goods Forum, the Green Blue Institute, and the Plastics Pact
Most recently, on October 29, 2025, the Attorneys General of Texas, Iowa, Nebraska, and Montana announced an inquiry into three environmental groups that lead, among other things, sustainable packaging initiatives.[7]
The Consumer Goods Forum implements “Golden Design Rules” on packaging design and helps members with their government engagement approaches to reduce plastic waste.[8] The Green Blue Institute seeks to “accelerate the transition to a regenerative, just, and sustainable materials economy.”[9] One program advancing this end is the Recycled Material Standard, which provides “two independent tracking system options supported by third party auditing integration to ensure that all use of recycled materials adhere to robust standards.”[10] Finally, the Plastics Pact likewise “aims to ensure that plastics never become waste,” by eliminating unnecessary plastics, promoting reusable plastics, and “circulating all the plastic items we use to keep them in the economy and out of the environment.”[11]
The coalition of attorneys general states it has “reason to believe” that the policies of these groups “are hindering states’ economic prosperity by coordinating business behavior, which would constitute violations of Florida’s antitrust laws.”[12] Specifically, “[b]y collectively dictating what materials are deemed ‘recyclable’ and setting uniform production and packaging targets, these groups appear to have distorted product quality and driven up prices for consumers.”[13]
Outlook
It is looking like 2026 will be the hottest year on record when it comes to States’ investigations into ESG initiatives. These developments illustrate a broadening state-level campaign to apply antitrust and consumer protection laws to ESG initiatives, from institutional investor coalitions to nonprofit standard-setters. With active litigation in Texas and parallel investigations involving Florida, Iowa, Nebraska, and Montana companies that engage with climate-focused alliances and disclosure frameworks should anticipate increased scrutiny and consider the potential legal risks of both committing to, and failing to meet, ESG-related standards.
To reduce antitrust risk, companies participating in ESG or net-zero initiatives should emphasize voluntary, nonbinding participation with clear freedom for members to adopt or reject principles unilaterally. Participation should be open, transparent, and nondiscriminatory, ideally administered by an independent third party.
Firms can also defend collaboration by showing credible procompetitive justifications—such as developing green technologies, improving efficiency, or expanding markets—while ensuring agreements are no broader than necessary.
If you have any additional questions, please contact Keagan Potts.
[1] Compl. Texas et al. v. BlackRock, Inc., et al., Case No. 6:24-cv-437-JDK, ECF No. 1, available at https://texasattorneygeneral.gov/sites/default/files/images/press/States%20v%20BlackRock%
20Complaint%20Filed.pdf; Keagan Potts, “Anti-ESG Sentiment Spurs States to Test Horizontal Shareholding Antitrust Theory,” SCL-LLP.com (Dec. 10, 2024), https://scl-llp.com/anti-esg-sentiment-spurs-states-to-test-horizontal-shareholding-antitrust-theory/
[2] Compl. ¶¶ 3–6.
[3] The Court’s opinion is available at https://www.texasattorneygeneral.gov/sites/default/files/
images/press/Order%20on%20MTD%20-%20Blackrock.pdf
[4] Scheduling Order, Texas et al. v. BlackRock, Inc., et al., Case No. 6:24-cv-437-JDK, ECF No. 134.
[5] Attorney General James Uthmeier Launches Investigation into Climate Cartel for Potential Consumer Protection and Antitrust Violations, Fla. Off. of Att’y Gen. (July 28, 2025), available at https://www.myfloridalegal.com/newsrelease/attorney-general-james-uthmeier-launches-investigation-climate-cartel-potential.
[6] Letter from Brenna Bird, Iowa Attorney General, to David Kennedy, CEO of SBTi (Aug. 8, 2025), available at https://www.iowaattorneygeneral.gov/media/cms/08_7801CAD84E300.pdf.
[7] Attorney General James Uthmeier Leads Multistate Coalition in Calling Out Radical Environmental Groups for Antitrust Violations, Fla. Off. of Att’y Gen. (Oct. 29, 2025), available at https://www.myfloridalegal.com/newsrelease/attorney-general-james-uthmeier-leads-multistate-coalition-calling-out-radical (“Uthmeier October 29, 2025 Press Release”)
[8] Commitments & Achievements, Consumer Goods F., https://www.theconsumergoodsforum.
com/planet/plastic-waste/about/our-achievements/ (last accessed Nov. 10, 2025).
[9] About, GreenBlue, https://greenblue.org/about-greenblue/ (last accessed Nov. 10, 2025).
[10] Recycled Material Standard, GreenBlue, https://greenblue.org/projects/recycled-material-standard/ (last accessed Nov. 10, 2025).
[11] Home, U.S. Plastics Pact, https://usplasticspact.org/ (last accessed Nov. 10, 2025).
[12] Uthmeier October 29, 2025 Press Release.
[13] Id.
