Twenty-three state attorneys general wrote a letter to Science Based Targets initiative expressing concern that firms adhering to the group’s net-zero greenhouse gas emissions standards risk violating federal antitrust laws. In a new insight, Director of Competition Policy Fred Ashton and Director of Energy and Environmental Policy Shuting Pomerleau explain the importance of federal agencies setting clear guidelines for firms and third-party organizations.

Key points:

• Many leading companies are collaborating with third parties to develop industry standards to accomplish net-zero targets, which means greenhouse gas emissions released into the atmosphere are offset by an equal amount being removed.
• Unilateral net-zero commitments do not typically violate federal antitrust law; the risk arises when companies collaborate – either directly or through a third party –and the agreements result in group boycotts, illegal price fixing, market allocation, or a reduction in output.
• As the popularity of net-zero and other environmental, social, and governance (or ESG) initiatives grows, prescriptive guidelines from the Federal Trade Commission and Department of Justice are necessary to help firms and third-party organizations avoid running afoul of antitrust laws.

Read the analysis.