Coal, climate, and competition
Hello and welcome to the latest edition of The Counterbalance newsletter. This week we’re taking a look at common ownership.
In November last year, a coalition of 13 American states spearheaded by Texas filed a suit against super financiers BlackRock, Vanguard and State Street, the world’s biggest institutional investors.
The suit alleged the three asset management giants used their combined dominant shareholdings in competing US coal companies to coordinate cuts in coal production under the guise of climate goals, thereby suppressing competition and driving up energy prices for American consumers.
The case strikes at a central subject of concern for anti-monopoly campaigners, common ownership, which posits that large institutions can wield shareholder influence across rival firms to stifle competition.
Common ownership is widely understood in anti-monopoly circles — it serves to reduce competition and increase prices, while blunting smaller shareholder voices in favour of behemoths that dominate corporate interests. But earlier this month, this case pushed the debate surrounding common ownership into unchartered territory, marking a potential watershed moment for the fight against unchecked corporate power.
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) have filed a Statement of Interest in the case, claiming that the three companies’ allegedly coordinated efforts to reduce coal output could constitute unlawful collusion. This marks the first time federal agencies have said large investors who own shares in rival companies risk violating antitrust laws.
It is important to clarify here that the involvement of the FTC and DOJ is highly political. Both agencies explicitly hit out at ESG (Environmental, Social, Governance) goals, describing the initiative as “anti-coal.”
In a recent statement earlier this month, the FTC said the alleged collusion has “forced American consumers to pay more for energy as part of an unlawful left-wing ideological scheme.”
“American consumers suffer when institutional asset managers use shareholdings in competing companies to orchestrate output reductions…we will not hesitate to stand up against powerful financial firms that use Americans’ retirement savings to harm competition under the guise of ESG,” said the DOJ’s Assistant Attorney General Abigail Slater.
It is ironic that US watchdogs are concerned that super financiers are quelling competition under the guise of ESG when they often use their power to quash sustainable finance in the first place, but for anti-monopoly advocates the DOJ’s and FTC’s involvement is vital.
It underscores the broader implications for sustainable finance in a sector dominated by powerful asset managers — and by highly politicised US federal agencies.
A previous version of The Counterbalance which covered SOMO’s colloquium on EU company transitions looked at the damage private equity is causing to society.
At that same colloquium was a very real fear that large US asset managers are even dominating the European investment fund markets, lamenting that these financial giants pursue a “fiduciary duty” to extract as much profit as possible, fuelled by a US-backlash against sustainable finance.
The push to extract maximum profit at the expense of sustainability is not isolated to the three giants of asset management, either. Earlier this year BP announced it would increase oil and gas spending to $10 billion a year, simultaneously rolling back its green energy initiatives over “misplaced faith” in renewable energy.
The US coal case provides a clear inflection point highlighting not only the need to demand space and protection for the decisions of environmentally conscious shareholders, but vitally for antitrust guidance on common ownership, as well as ESG investing.
Clearer rules or guidelines from national regulators need to identify when overlapping shareholdings become a serious public concern, and greater transparency in voting engagement should — ultimately — require asset managers to disclose voting records so the public can determine whether they match with long term ESG strategies.
Finally, this case provides a unique opportunity to push for diverse ownership, encouraging the growth of independent, sustainability-driven asset managers that can inject competitive pressure onto industry stalwarts and amplify climate-related priorities on Wall Street.
For advocates of democratic market economies and sustainable finance, this case provides a clear reminder: power concentrated in the hands of a powerful few can distort our environmental and social sustainability objectives, and vigilance from investors is more important now than ever.
Weekly highlights:
An interesting POLITICO scoop this week: the British government apparently believes that Ai can do two-thirds of most of the work currently done by junior civil servants. Documents obtained by POLITICO show that digitising the public sector could yield a whopping £45 billion in annual productivity savings, but that figure rests on one key assumption that 62% of tasks done by junior staff members can be automated.
The Department of Justice is not just aiming its sights on the world’s largest asset managers. The US federal agency is also investigating Google over its agreement with AI startup Character.AI, a deal which investigators are now probing to discover potential violations in federal antitrust laws.
The European Commission has expanded an investigation into Visa and Mastercard fees, and seek feedback from third parties that could end with the payment giants being hit with charges of anti-competitive charges, according to a recent scoop by Reuters.
TikTok’s 2024 takeover of Indonesia’s largest e-commerce platform Tokopedia presented monopoly risks, according to the country’s competition authority, which claimed the possibility of increased consumer prices as a result of a significant increase in market concentration.
Soundbite of the week: Telegram CEO issues plea to lawmakers
Chief executive and founder of encrypted-messaging platform Telegram has appealed to European lawmakers not to target his company as opposed to American tech giants like Meta and Google.
Important context: encrypted messaging apps have been widely used for criminal activity in the past. In the summer of 2024, French authorities arrested Durov briefly amid an investigation linked to fraud, drug trafficking, organised crime, cyber-bullying and terrorism promotion. At the time, the Telegram chief said the platform was statistically “bound” to have bad actors use it on account of the fact it boasts over one billion users worldwide.
“We are the only non-US company, we are not protected by this big, big American government that is very powerful,” Durov said this week.
Data mining: British banks and a global climate crisis
The climate-related activities of some of the UK’s largest banks have been exposed as not aligning with net-zero commitments, including Barclays, HSBC, and Lloyds.
According to a new study published by FinanceMap, a research program by climate think tank InfluenceMap, these three banking giants have had higher deal flows to fossil fuel companies than to green companies — defined as companies deriving at least 75% of revenue from EU taxonomy-aligned activities — between the years 2020-2024.
NatWest, which also financed activities connected to fossil fuels, is the only bank which has a higher level of green financing exposure.
The Counterbalance is published every Thursday. Please send thoughts and feedback to scott@balancedeconomy.org.
Thanks for this. I'm continuing to stock up on tires, tubes and spares for the rwo vintage English bicycles that provide most of my transportation. Imagine what might transpired if motorists all reduced their fuel consumption by even 20%? Even just for a couple of months?