A federal judge in Texas has allowed the bulk of a high-profile lawsuit to move forward against three of the world’s largest asset managers, in a case that could reshape how major financial firms engage with environmental policy through their investments.\n\nAccording to Bloomberg, U.S. District Judge Jeremy Kernodle rejected efforts by BlackRock Inc., Vanguard Group Inc., and State Street Global Advisors to fully dismiss the lawsuit brought by Republican attorneys general from Texas and several other states. The case accuses the asset managers of colluding to limit coal production in the United States under the banner of sustainable investing.\n\nKernodle ruled Friday that most of the antitrust claims may proceed, stating the states presented “enough circumstantial evidence” to suggest the firms “agreed to collectively pressure coal companies to reduce the output of coal” and to disclose information about future production. The judge did, however, dismiss portions of the case tied to alleged violations of individual state laws.\n\nPer Bloomberg, the lawsuit centers on the asset managers’ involvement in climate-focused investment coalitions, which the plaintiffs argue functioned as a de facto cartel. The states allege that these firms leveraged their significant holdings to drive down coal output, thereby restricting competition in the energy sector.\n\nIn response to the court’s decision, the firms reiterated their defense. BlackRock dismissed the lawsuit as “absurd,” stating in a prepared comment that the claims are “not supported by the facts.” State Street said the case promotes a “new and dangerous antitrust theory” and warned it could create unwarranted risk for both investors and energy markets. Vanguard, for its part, expressed disappointment in the ruling but emphasized its intent to “vigorously defend” against the allegations.\n\nThe legal action, spearheaded by Texas Attorney General Ken Paxton, accuses the asset managers of acting in concert to shape U.S. energy policy through coordinated investment strategies. Paxton heralded the judge’s ruling as a major development. In a statement, he accused the firms of forming “an investment cartel to illegally control national energy markets.”\n\nAs the case moves forward, it could have far-reaching implications for how asset managers align investment portfolios with environmental and social goals. The lawsuit touches on the growing tension between sustainable investing and regulatory scrutiny, particularly in Republican-led states critical of ESG (Environmental, Social, and Governance) strategies.

BlackRock, State Street, Vanguard Must Face Antitrust Suit

A federal judge in Texas allowed a high-profile antitrust lawsuit against BlackRock, State Street, and Vanguard to proceed, accusing the firms of colluding to limit coal production under the guise of sustainable investing. The case, led by Texas Attorney General Ken Paxton, alleges the asset managers formed an investment cartel to influence U.S. energy policy. The firms have dismissed the claims as unfounded, while the lawsuit highlights tensions between sustainable investing and regulatory scrutiny.