AG Reyes Praises Texas for Antitrust Case Against ESG Asset Managers, Pledges Investigation

Utah Attorney General Sean D. Reyes recently announced his support for a lawsuit filed by Texas Attorney General Ken Paxton. Texas and a coalition of ten states sued three asset manager companies, Blackrock, Inc., State Street Corporation, and The Vanguard Group, Inc. The suit claims that they used their economic power to buy stock in nine coal companies and then used their influence as shareholders to force those companies to reduce coal output to meet politically motivated ESG climate emission goals. As a result of the reduced coal production, prices for the types of coal produced by those companies went up. The lawsuit asserts that "As demand for the electricity Texans 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."

"For years I have been expressing concerns about the politically driven ESG investment agendas of some of America's largest asset management companies, including these three defendants and others who appear to be putting their ideology ahead of their duties to investors," said Utah Attorney General Sean D. Reyes. "Since early 2022 I have been part of a group of about twenty attorneys general who have repeatedly warned those asset management companies that their partisan activities may violate the law. We have sent them a series of open letters in an effort to get them to stop their practices, and some have quit activist groups such as Climate Action 100+ in response."

Addressing the Texas case, Attorney General Reyes added:

"This lawsuit goes further and alleges that these three defendants are actually harming Texas consumers by manipulating the free market to raise prices. Because the companies that mine coal in Utah are not named in the Texas case, I have instructed my antitrust lawyers to aggressively investigate whether the same thing is happening here with respect to Utah coal companies. I applaud Texas and the other ten states for bringing this lawsuit, and warn the defendants that if we find clear antitrust violations that harm Utah consumers, we will either file our own lawsuit or seek to join the Texas lawsuit at a later date."

The Texas lawsuit also alleges that investors in Blackrock have been misled because Blackrock claims to offer both ESG focused and traditional profit focused investment fund options, but in fact applies ESG investment principles to all of its investment funds.

Read the complaint here.