BlackRock, State Street and Vanguard have been sued by Texas and 10 other Republican-led states, saying the large asset managers violated antitrust law through climate activism that resulted in reduced coal production and Energy prices increased.
The complaint, filed Wednesday in federal court in Tyler, Texas, is one of the highest-profile lawsuits targeting efforts to promote environmental, social and governance goals, or ESG,
The defendants are accused of exploiting their market power to pressure coal companies to cut production and reduce carbon emissions from coal by more than 50% by 2030, increasing consumers’ utility bills, and joining climate advocacy groups. The allegation was made.
“Competitive markets – not the dictates of far-flung asset managers – should determine the price Americans pay for electricity,” the states said in the complaint.
Larry Fink’s BlackRockState Street and Vanguard have more than $26 trillion in assets under management.
Neither company immediately responded to requests for comment.
The 11 states also include Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia and Wyoming.
Republicans have long explored using US antitrust laws to target alleged collusion among big fund managers to pursue climate-related goals.
Climate advocates, in contrast, consider it necessary to assess environmental risks to assess the value of investments.
Major stake in coal companies
The states objected to BlackRock, State Street and Vanguard allegedly pressuring coal companies to make the change in 2021.
He also criticized the defendants’ membership in the Net Zero Asset Managers Initiative, which says members Committed Compliance with all antitrust laws, and BlackRock and State Street’s membership in the Climate Action 100+.
Vanguard quits net zero initiative in 2022, while BlackRock and State Street quit Climate Action 100+ in February.
But the states said the withdrawal did not negate the “ongoing and future threat” of continued pressure.
It cited the defendants’ investments in nine coal companies, including combined respective stakes of 34.2% and 30.4% in Arch Resources and Peabody Energy, the largest publicly traded U.S. coal producers.
The lawsuit also accused BlackRock of “actively deceiving” investors about its non-ESG funds by promising they were dedicated to increasing shareholder value, when it allegedly used all of its holdings to fund its climate efforts. To further the goals.
The lawsuit seeks to prevent BlackRock, State Street and Vanguard from using their investments to vote on shareholder proposals and take other steps that could undermine coal production and limit market competition.
It also seeks civil penalties for violating federal antitrust and Texas consumer protection laws.
The case is Texas et al v. BlackRock Inc et al, U.S. District Court, Eastern District of Texas, No. 24-00437.
