What's happened
Texas Attorney General Ken Paxton has filed a lawsuit against BlackRock, Vanguard, and State Street, alleging antitrust violations related to their influence on coal production. The suit claims these firms colluded to reduce coal output, leading to higher electricity prices for consumers. This marks a significant challenge to ESG investing practices.
Why it matters
What the papers say
According to Axios, Texas Attorney General Ken Paxton's lawsuit claims that BlackRock, Vanguard, and State Street colluded to reduce coal output, which allegedly led to increased electricity prices for consumers. The complaint states, 'Rather than individually wield their shareholdings to reduce coal output, Defendants effectively formed a syndicate.' In contrast, Bloomberg highlights that the lawsuit is among the most high-profile challenges to the ESG industry, emphasizing the potential for significant legal ramifications. The New York Post notes that the case could exploit antitrust laws to target large fund managers, suggesting a strategic shift in how conservatives approach climate-related corporate governance. Each source underscores the lawsuit's implications for both the energy market and the future of ESG investing.
How we got here
The lawsuit, filed in late November 2024, is part of a broader conservative backlash against ESG investing. It alleges that major asset managers have used their market power to manipulate coal production, impacting energy prices amid rising scrutiny of corporate environmental initiatives.
Common question
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What is the Texas lawsuit against major asset managers over ESG investing?
Texas Attorney General Ken Paxton has initiated a significant legal battle against major asset managers like BlackRock, Vanguard, and State Street. This lawsuit raises critical questions about the influence of these firms on coal production and the broader implications for ESG investing. Below, we explore the key aspects of this case and its potential impact on the energy market and corporate governance.
More on these topics
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State Street Corporation is an American financial services and bank holding company headquartered at One Lincoln Street in Boston with operations worldwide.
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BlackRock, Inc. is an American global investment management corporation based in New York City. Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with $7.4 trillio
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Texas is a state in the South Central Region of the United States. It is the second largest U.S. state by both area and population.
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Warren Kenneth Paxton Jr. is an American lawyer and politician who has served as the Attorney General of Texas since January 2015. Paxton is a Tea Party conservative. He previously served as Texas State Senator for the 8th district and the Texas State Rep