Asset management firm Vanguard is paying $29.5 million to multiple states to settle an antitrust lawsuit over its environmental, social, and governance investing goals.
The suit, filed by Texas and a dozen other states, accused Vanguard, BlackRock, and State Street of conspiring to raise coal prices by pushing climate activism on to companies supplying the resource. The investment management firms allegedly pressed such companies to adopt green energy policies that would inevitably lead to higher energy prices, thereby violating antitrust laws.
The settlement was announced on Thursday by multiple attorneys general, led by Attorney General Ken Paxton (R-TX).
“I am glad to see that Vanguard has chosen to protect investors and become the industry leader when it comes to empowering investors with proxy voting choice,” Paxton said in a statement, describing the settlement as the first of its kind. “This sets a new standard for institutional investors that every company should follow.”
Vanguard and other firms have been frequently targeted by Republicans over their ESG practices in voting and investing. The climate policies are now out of fashion under the Trump administration.
The lawsuit gained momentum last year when the Department of Justice and Federal Trade Commission submitted briefs in support of the state officials’ claims against Vanguard and the two other firms. The suit was first filed by 11 states in November 2024. Two more states joined later.
Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, Oklahoma, West Virginia, and Wyoming are all plaintiffs in the Texas-led lawsuit.
“We’ve reached a resolution to put this matter behind us—a resolution that reaffirms our longstanding practices and standards and the passive nature of our index funds,” a Vanguard spokesperson said, acknowledging the new settlement.
Meanwhile, BlackRock and State Street are still battling the lawsuit.
“While Vanguard has taken appropriate action to resolve this case, BlackRock and State Street have continued to ignore state laws, engage in anticompetitive schemes that hurt American energy, and undermine those who use their services to invest,” Paxton added. “Coal is an essential industry to support America’s ever-growing energy demands, and my office will continue to uproot and destroy any attempt by investment giants to push a woke agenda that puts American energy at risk.”
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In response, State Street called the lawsuit “baseless and without merit.” BlackRock has not issued a public response to the latest legal development in the case.
Iowa Attorney General Brenna Bird vowed the multistate coalition will set its “sights on BlackRock and State Street now and continue to fight for truly competitive markets to help Iowans and all Americans.”
