Major institutional investors artificially reduced coal production and increased energy costs for consumers in an attempt to reduce global carbon emissions, a federal lawsuit says.
Republican attorneys general in 11 states filed suit joint lawsuit last month against BlackRock, Vanguard and State Street, alleging that the organizations’ efforts to pressure coal companies to cut their carbon emissions and respond to climate change amounted to anticompetitive business practices.
All three companies, the lawsuit says, acquired significant stakes in the largest publicly traded coal companies to coerce their management.
“For four years, America’s coal producers have responded not to the price signals of the free market, but to the commands of Larry Fink, BlackRock’s chairman and CEO, and his fellow asset managers,” the lawsuit says.
BlackRock is the world’s largest financial asset manager.
The case was brought in the U.S. District Court for the Eastern District of Texas on behalf of the states of Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia and Wyoming.
The case asks the court to find that the companies violated federal antitrust laws and ban them from using their stock holdings in coal companies to limit production.
In a statement, State Street called the lawsuit “baseless.”
“State Street acts in the long-term financial interests of investors while focusing on increasing shareholder value,” the company said. “As long-term investors, we have a common interest in the long-term success of our portfolio companies.”
In 2020, Fink wrote in a letter to CEOs that “climate risk is investment risk” and announced efforts to “put sustainability at the heart of our investment approach.” He said companies and investors have an critical role to play in the transition from fossil fuels and coal to neat energy.
The following year, BlackRock, State Street and Vanguard joined the Net Zero Asset Managers Initiative, recognizing the “urgent need to accelerate the transition to global net zero emissions” and committed to working to reduce carbon emissions . Black Rock and State Street have also joined Climate Action 100+, a similar initiative in which investors work with companies “to improve climate change governance, reduce emissions and improve climate-related financial disclosure.”
Burning coal produces carbon dioxide, the most common greenhouse gas and a key driver of climate change, scientists say. It also produces sulfur dioxide, fine dust and other emissions that can be harmful to health.
It found that in 2022, coal accounted for 19% of energy-related carbon emissions and more than half of electricity company emissions Energy information management.
In a press release, Nebraska Attorney General Mike Hilgers’ office accused the three companies of weaponizing their shares of the coal market.
“Whether it comes from state or federal governments or the private sector,” Hilgers said, “the radical climate agenda is hurting Nebraskans.”
Missouri Attorney General Andrew Bailey vowed “not to stand idly by while these companies hinder energy production and raise prices for Missouri consumers.”
Indiana Attorney General Todd Rokita’s office said in a news release that he is “taking further action to prevent labor corporatists and their left-wing allies in government from driving up energy costs for hard-working Hoosiers.”
“Coal has been the backbone of Indiana’s economic success for decades,” Rokita said. “Demand for electricity has increased and these (environmental, social and governance) titans are benefiting from skyrocketing prices by retaining control of production.”
And Iowa Attorney General Brenna Bird said she would keep fighting “until we have shut down every cog in the woke machine and protected hardworking families and farmers.”
“As Woke Wall Street lines its own pockets,” Bird said, “families and farmers are forced to pay the price.”
