Republican AGs sue BlackRock, other investment firms over ‘woke’ climate action efforts

The Lawrence Energy Center in Kansas burns coal for electric power. A federal lawsuit filed by 11 Republican attorneys general claims institutional investors BlackRock, Vanguard and State Street committed antitrust violations to lower supply and increase the cost of coal. (Photo by Jill Hummels/Kansas Reflector)

Major institutional investors have artificially lowered coal production and raised energy costs for consumers in an effort to lower global carbon emissions, a federal lawsuit claims.

Republican attorneys general in 11 states filed a joint lawsuit last month against BlackRock, Vanguard and State Street, claiming the organizations’ efforts to pressure coal companies to lower carbon emissions and respond to climate change amount to anti-competitive business practices.

All three companies, the lawsuit says, have acquired significant shares in the largest publicly-traded coal companies to coerce their management.

“For the past four years, America’s coal producers have been responding 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 in 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 have violated federal antitrust laws and prohibit them from using their stock holdings in coal companies to limit output.

In a statement, State Street called the lawsuit “baseless.”

“State Street acts in the long-term financial interests of investors with a focus on enhancing shareholder value,” the company said. “As long-term capital providers, we have a mutual 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 “place sustainability at the center of our investment approach.” He said companies and investors had a meaningful role to play in the transition from fossil fuels and coal to clean energy.

The following year, BlackRock, State Street and Vanguard joined the Net Zero Asset Managers Initiative, acknowledging an “urgent need to accelerate the transition towards global net zero emissions” and committing to work to reduce carbon emissions. Black Rock and State Street also signed onto Climate Action 100+, a similar initiative where investors work with companies “on improving climate change governance, cutting emissions and strengthening climate-related financial disclosures.

Burning coal produces carbon dioxide, the most prevalent greenhouse gas and a significant drive of climate change, scientists say. It also produces sulfur dioxide, particulates and other emissions that can be harmful to human health.

Coal made up 19% of energy-related carbon emissions in 2022 and more than half of emissions from electric power companies, according to the Energy Information Administration.

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 harms Nebraskans.”

Missouri Attorney General Andrew Bailey vowed to  “not stand idly by while these companies hamper energy production and raise prices for Missouri consumers.”

Indiana Attorney General Todd Rokita’s office said in a press release that he was “taking further action to stop work corporatists and their left-leaning allies in government from driving up energy costs for hardworking Hoosiers.”

“Coal has been the backbone of Indiana’s economic success for decades,” Rokita said. “The demand for electricity has gone up and these (environmental, social and governance) titans are reaping the benefits of these skyrocketed prices by keeping their thumb on production.”

And Iowa Attorney General Brenna Bird said she would keep “fighting until we take down every cog of the woke machine and protect hardworking families and farmers.”

“While Woke Wall Street lines its own pockets,” Bird said, “families and farmers are forced to pay the price.”

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