Texas Attorney General Ken Paxton has spearheaded a multi-state lawsuit against prominent investment firms BlackRock, Vanguard, and State Street.
According to ESG Today, the legal action, supported by ten additional states, alleges that these asset managers have misused their significant influence in climate-centric investment strategies to manipulate the coal markets and inflate energy costs. This lawsuit marks a pivotal moment in the broader anti-ESG movement championed by Republican leaders in the United States, particularly in Texas.
The complaint asserts that BlackRock, Vanguard, and State Street collectively held substantial stakes in leading coal producers such as Peabody Energy and Arch Resources. These holdings are claimed to exceed 30% and are accused of driving concerted efforts to curtail coal production to meet clean energy investment targets. This, the lawsuit argues, has led to escalated energy costs for consumers across the nation. The Attorneys General contend that this strategic shareholding contravenes the Clayton Act by potentially diminishing competition significantly.
Amidst these allegations, the asset managers have responded by distancing themselves from several climate initiatives. Vanguard withdrew from the Net Zero Asset Managers Initiative in 2022, and State Street exited Climate Action 100+ earlier this year, citing overly stringent requirements that misaligned with their client-centric objectives. BlackRock has also modified its involvement, shifting its Climate Action 100+ commitments to its international branch.
Despite their departures from these initiatives, the plaintiff states maintain that the asset managers’ actions continue to pose a significant anticompetitive threat and do not absolve them of past legal infringements. In response to the lawsuit, spokespeople from BlackRock and State Street described the legal claims as “baseless” and “defying common sense.”
The Texas AG’s office emphasized that this alleged conspiracy has not only contravened federal competition laws but also violated Texas state laws against antitrust and deceptive trade practices.
The lawsuit is supported by several states including Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming.
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