Vanguard, Worlds 2nd Largest Fund Manager, Settles Coal Lawsuit With States

Cows graze in a field near the coal-fueled Oak Grove Power Plant in Robertson County, Texas, on April 29, 2024. Brandon Bell/Getty ImagesThe longstanding movement to compel corporations to pursue climate and social-justice goals faced a significant setback with the Feb. 26 settlement by Vanguard, the world’s second-largest asset manager, of a lawsuit by 11 state attorneys general, alleging illegal collusion against the coal industry. Since its origins within the United Nations in 2004, the environmental, social and governance (ESG) industry has risen to become a powerful tool to influence corporate behavior, often with the support of institutional asset managers that were dominant shareholders in many, if not most, S&P 500 companies. The lawsuit being brought by conservative state AGs charged the “Big Three” asset managers, BlackRock, Vanguard, and State Street, with “conspiring to artificially constrict the market for coal through anticompetitive trade practices,” according to a statement from the office of Texas Attorney General Ken Paxton, who led the effort.