Montgomery, AL – Alabama Attorney General Steve Marshall has joined a multistate coalition in filing a lawsuit against three of the largest institutional investors in the world—BlackRock, State Street Corporation, and Vanguard Group. The coalition accuses the firms of conspiring to manipulate the coal industry through anticompetitive trade practices, ultimately driving up energy costs for consumers across the United States.
According to the lawsuit, over several years, BlackRock, State Street, and Vanguard acquired significant stockholdings in nearly every major publicly held coal producer in the U.S., gaining the power to influence the policies of these companies. The coalition claims that in 2021, the three asset managers used their collective influence to push coal producers to reduce output in favor of “green energy” goals. Their stated aim was to cut coal production by more than half by 2030.
Attorney General Marshall criticized the actions of the firms, emphasizing that Wall Street investment firms should prioritize profits rather than pursuing environmental agendas. “Americans think that when they entrust their hard-earned savings to Wall Street firms, those firms will seek profits, not radical environmental goals,” Marshall said. “But time and again, companies like BlackRock, State Street, and Vanguard invest as activists, not dispassionate fiduciaries.”
The lawsuit alleges that the asset managers violated federal antitrust laws by working together to artificially limit the supply of coal, thereby driving up energy prices. This resulted in significant revenue gains for the firms at the expense of consumers, the lawsuit claims. In addition to antitrust violations, the lawsuit asserts that the firms also breached state laws on deceptive trade practices.
The three companies have also been accused of misleading investors who chose non-Environmental, Social, and Governance (ESG) funds in an effort to maximize profits. Despite the investors’ intentions, the funds adopted ESG strategies, contradicting their initial representations.
BlackRock, State Street, and Vanguard are also linked to various environmental initiatives such as “Climate Action 100” and the “Net Zero Asset Managers Initiative.” These pledges, according to the coalition, served to further signal the firms’ intent to curb coal output, contributing to higher electricity prices nationwide.
The lawsuit is a major challenge to the power of institutional investors in the coal sector and aims to hold these companies accountable for their alleged anticompetitive behavior.
