In a surprising turn of events, a lawsuit filed in Texas has raised allegations that some of the world’s largest investment firms, including BlackRock, Vanguard, and State Street, colluded to intentionally reduce coal production as part of a broader strategy to combat climate change. This unusual legal action claims that these financial giants are engaged in an illegal conspiracy aimed at influencing the coal market.
The lawsuit was initiated by the Texas Attorney General, alongside ten other states, and seeks to hold these investment firms accountable for their alleged actions. During a recent federal court hearing in Texas, a lawyer representing BlackRock, Gregg Costa from the firm Gibson Dunn, argued that the claims made in the lawsuit “defy economic reality.” He insisted that the decline of the coal market has been ongoing for decades, attributing it to various factors that predate the purported conspiracy.
The attorney for Texas, Brian Barnes of Cooper & Kirk, pointed out that BlackRock’s CEO, Laurence D. Fink, has previously stated that corporations should establish targets for reducing greenhouse gas emissions. For coal companies, this would logically lead to “reducing output,” which is at the heart of the allegations made in the lawsuit.
As a major oil and gas-producing state, Texas has been particularly aggressive in its stance against financial institutions regarding climate change policies. The state has enacted laws that prohibit state entities from engaging in business with investment firms identified as boycotting energy companies. In January, Texas Attorney General Ken Paxton and his counterparts from other states issued a warning to financial institutions, suggesting that their climate policies could trigger enforcement actions.
As political dynamics shift in Washington, many financial firms, including BlackRock and State Street, have begun to retract their involvement in climate action initiatives. The lawsuit highlighted that both firms have withdrawn from the trade association known as Climate Action 100+, while Vanguard was never a member. Additionally, these firms have exited the Net Zero Asset Managers Initiative, which has faced criticism from conservative circles.
This lawsuit has sparked a heated debate about the role of investment firms in the energy sector and their influence over corporate policies related to climate change. As the legal proceedings unfold, the implications for both the coal industry and the broader investment landscape will continue to develop.
