Investors discussing escalation plans when it comes to corporate engagement would be “high risk” from an antitrust perspective, according to John Hoeppner, US head of stewardship and sustainable investments at Legal & General Investment Management’s US arm.
Hoeppner was speaking on a panel at RI USA on Wednesday discussing whether antitrust could kill collective engagement.
Responding to a question from the audience on the feasibility of collaborative escalation, he said that shareholders can come to the same conclusion independently, “but it can’t be discussed or designed”.
“I think that would be a line or at least would be a line for Legal & General… we have our own views going into the collaboration of how to escalate… I think shared escalation is going to be high risk,” Hoeppner said.
Accusations of antitrust violations have been thrown around by opponents of ESG and sustainability in the US. At RI USA there was, however, a surprising degree of consensus on the validity of such accusations.
In his opening remarks, Daniel Crowley, a declared Republican, and partner at US law firm K＆L Gates LLP, described the antitrust challenges by some within the party as “sort of nutty to me”.
“Republicans spend four years telling us that collusion is not a crime in the context of the Russia investigation, and now it’s supposed to be a crime to collude to save the planet – I don’t find that compelling,” he told attendees.
Echoing this, Denise Hearn, an academic specialising in antitrust who was on the panel with Hoeppner, pointed to hypocrisy among those on the right seeking to use antitrust laws to stymie climate efforts.
“I think what’s important to note perhaps that it is generally the same sort of group of actors who are using antitrust arguments to chill climate-related collaborations are also the same groups which are trying to dismantle the antitrust agencies’ capacity to regulate this.”
She described attempts to invoke these laws as “accusations in search of a legal theory”, adding that from her perspective, “most of the activity that groups that have been targeted are engaged in is benign under the antitrust laws”.
On whether antitrust is killing collaborative engagement, Hoeppner said that he does not believe it is, but added that the reality today is that most asset managers and investors are not participating in collaboration.
“So, something is spooking them – they either decided it’s ineffective or they’re genuinely concerned about the legal [risk], or, I mean, if I were taking pop shots, it’s a convenient excuse to not join collaborations because of the legal considerations.”