Attorney General Hanaway, Coalition of States Secure Agreement from Vanguard to Protect Energy Markets from ESG

JEFFERSON CITY, MO – Today, Missouri Attorney General Catherine Hanaway announced that a coalition of 13 states, in a monumental, first-of-its kind settlement with The Vanguard Group, Inc. (“Vanguard”), have resolved part of their lawsuit against asset managers BlackRock, State Street, and Vanguard. As part of the settlement, Vanguard has agreed to make the strongest passivity commitments in the industry and to empower its investors with proxy voting—a first for the industry.

“This agreement with Vanguard is an important step in the right direction to protect American investors from green energy scams seeking to undermine our energy markets,” said Attorney General Hanaway. “ESG and radical social agendas have no place in our business marketplace. We will continue to support efforts to hold asset managers accountable and protect the millions of Missourians who rely on coal power.”

The lawsuit seeks to lower the cost of coal and electricity prices throughout the United States by combatting a BlackRock-led investment cartel that sought to drive up the price of coal under the guise of “green energy.” BlackRock’s efforts produced massive profits for itself and its co-conspirators and raised the prices of electricity on consumers throughout the United States. To further profit on the back of Americans, BlackRock also deceived thousands of its investors who elected to invest in non-ESG (Environmental, Social, and Governance) funds.

This landmark settlement represents one of the most significant enforcement actions ever taken against coordinated ESG-driven market manipulation, ensures a competitive and low-cost coal industry, and fundamentally resets the precedent for the conduct of large institutional investors. Under the settlement, Vanguard has committed to avoid imposing ESG goals over its customers’ profitability.

Vanguard has agreed to pay $29.5 million to the states. In addition, Vanguard will offer proxy voting to investors in funds accounting for at least 50 percent of assets invested in U.S. equity funds it advises. This will ensure that Vanguard’s customers can make their voices known on portfolio companies’ business, including whether companies should maximize profitability over ESG or other goals.

In addition to Missouri, attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Montana, Nebraska, Oklahoma, Texas, West Virginia, and Wyoming joined as plaintiffs.

Read the settlement here.