Texas-led GOP states sue BlackRock, Vanguard, State Street over coal cuts
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The news: BlackRock, Vanguard and State Street have been sued by Texas and ten other Republican-led states, alleging the firms violated antitrust laws by pressuring coal producers to cut output through coordinated climate policies, resulting in higher energy prices.
The context: Filed in federal court in Texas on Wednesday, the suit claims the asset managers used their shareholdings and memberships in climate groups like Climate Action 100+ and the Net Zero Asset Managers Initiative to push coal companies to cut output, according to media reports citing the court documents.
It describes their actions as reducing competition and creating “cartel-level profits,” citing alleged violations of the Clayton Antitrust Act.
Bloomberg noted Vanguard exited the Net Zero Asset Managers Initiative in 2022, while BlackRock and State Street remain members of the group, which is part of the Glasgow Financial Alliance for Net Zero.
What they said: The complaint says that, "competitive markets—not the dictates of far-flung asset managers—should determine the price Americans pay for electricity."
It also accuses BlackRock of “actively deceiving” investors about its non-ESG funds by representing they would be dedicated solely to enhance shareholder value when it allegedly used its holdings to advance its climate goals.
“The American consumer is entitled to enjoy the fruits of free markets, vigorous competition, and (in the case of BlackRock) honest investment managers,” it adds.
Blackstone told media that “the suggestion that BlackRock has invested money in companies with the goal of harming those companies is baseless and defies common sense."
"This lawsuit undermines Texas’s pro-business reputation and discourages investments in the companies consumers rely on,” it added.
Vanguard and State Street have not yet commented.
