December 1, 2024 - Several Republican attorneys general filed a lawsuit Wednesday against three major U.S. investment companies over concerns regarding their environmental activism.

Texas Attorney General Ken Paxton and 10 other AGs accused BlackRock, Vanguard, and State Street of violating antitrust laws by promoting environmental, social, and governance goals. The companies, some of the largest investors in U.S. coal production, allegedly pose a threat to competition within the energy industry.

The complaint alleges the companies’ actions have driven up coal and energy prices.

“As demand for the electricity Americans need to heat their homes and power their businesses has gone up, the supply of the coal used to generate that electricity has been artificially depressed—and the price has skyrocketed,” the document reads. “Defendants have reaped the rewards of higher returns, higher fees, and higher profits, while American consumers have paid the price in higher utility bills and higher costs.”

The 109-page complaint charges the companies with seven violations and seeks $10,000 per violation, along with other fines.

“Texas will not tolerate the illegal weaponization of the financial industry in service of a destructive, politicized ‘environmental’ agenda,” Paxton wrote on X. “BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices. Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of state and federal law.”

BlackRock said it has complied with federal regulations regarding its involvement in the energy sector.

“BlackRock’s holdings in energy companies are regularly reviewed by federal and state regulators,” it wrote. “We make these investments on behalf of our clients, and our focus is on delivering them financial returns.”

“The suggestion that BlackRock has invested money in companies with the goal of harming those companies is baseless and defies common sense,” it added. “This lawsuit undermines Texas’ pro-business reputation and discourages investments in the companies consumers rely on.”

State Street called the lawsuit “baseless” in a statement Friday morning.

“State Street acts in the long-term financial interests of investors with a focus on enhancing shareholder value. As long-term capital providers, we have a mutual interest in the long-term success of our portfolio companies,” a State Street spokesperson said.

The lawsuit follows President-elect Donald Trump’s decision to nominate Liberty Energy CEO Chris Wright to lead the Department of Energy. Trump said Wright would oversee “U.S. energy dominance,” along with his pick to lead the Department of the Interior, North Dakota Gov. Doug Burgum.