Alabama’s Attorney General and several Republican officials have initiated legal action against investment firms regarding their climate action initiatives perceived as ‘woke.’
A federal lawsuit alleges that significant institutional investors have manipulated coal production and increased energy costs for consumers in a bid to reduce global carbon emissions.
Last month, attorneys general from 11 Republican-led states initiated a collective legal action against BlackRock, Vanguard, and State Street. They argue that the companies’ attempts to urge coal firms to reduce carbon emissions and address climate change constitute anti-competitive business behavior.
The lawsuit alleges that all three firms have obtained substantial stakes in the largest publicly-traded coal companies to exert pressure on their management.
“For the past four years, America’s coal producers have been responding not to the price signals of the free market, but to the commands of Larry Fink, BlackRock’s chairman and CEO, and his fellow asset managers,” the lawsuit says.
BlackRock holds the title of the largest financial asset manager globally.
The matter was presented in the U.S. District Court for the Eastern District of Texas, representing the interests of Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming.
The lawsuit seeks a judicial determination that the corporations have breached federal antitrust regulations and aims to prevent them from leveraging their equity in coal firms to restrict production.
State Street described the lawsuit as “without merit” in a statement.
“State Street acts in the long-term financial interests of investors with a focus on enhancing shareholder value,” the company said. “As long-term capital providers, we have a mutual interest in the long-term success of our portfolio companies.”
BlackRock described the lawsuit as “groundless” and stated that it “goes against all logic.”
“On behalf of our clients, we have billions invested in the energy sector, partnering with states to attract investment into energy infrastructure and helping millions of Americans retire with dignity,” the company said.
In 2020, Fink communicated to CEOs that “climate risk is investment risk” and revealed initiatives to “place sustainability at the center of our investment approach.” He emphasized that businesses and investors are crucial in the shift from fossil fuels and coal to renewable energy sources.
In the subsequent year, major financial firms such as BlackRock, State Street, and Vanguard became part of the Net Zero Asset Managers Initiative, recognizing the critical importance of hastening the shift towards achieving global net zero emissions and pledging to take action in lowering carbon emissions. Black Rock and State Street have also joined a comparable initiative where investors collaborate with companies to enhance governance related to climate change, reduce emissions, and bolster financial disclosures associated with climate issues.
According to scientists, the combustion of coal generates carbon dioxide, which is the most common greenhouse gas and a major contributor to climate change. Additionally, it generates sulfur dioxide, particulates, and various emissions that pose risks to human health.
In 2022, coal accounted for 19% of energy-related carbon emissions and contributed to over half of the emissions produced by electric power companies, as reported by the Energy Information Administration.
Nebraska Attorney General Mike Hilgers’ office has issued a statement alleging that the three companies are exploiting their positions in the coal market.
“Whether it comes from state or federal governments or the private sector,” Hilgers said, “the radical climate agenda harms Nebraskans.”
Missouri’s top legal official, Andrew Bailey, pledged to take action against companies that hinder energy production and increase costs for consumers in the state.
Indiana’s Attorney General Todd Rokita announced in a press release that he is “taking further action to prevent corporate interests and their progressive allies in government from increasing energy costs for diligent residents of Indiana.”
“Coal has been the backbone of Indiana’s economic success for decades,” Rokita said. “The demand for electricity has gone up and these (environmental, social and governance) titans are reaping the benefits of these skyrocketed prices by keeping their thumb on production.”
Iowa Attorney General Brenna Bird expressed her determination to continue battling against what she describes as the “woke machine,” emphasizing her commitment to safeguard the interests of hardworking families and farmers.
