US Judge Denies Asset Managers’ Bid to Dismiss Antitrust Lawsuit Over Climate Actions
On Friday, a federal judge in the United States largely denied a motion from leading asset management firms, including BlackRock, to dismiss an antitrust lawsuit put forth by Texas and 12 other Republican-led states. The states contend that these firms engaged in climate activism that led to reduced coal production and increased energy prices, thus violating antitrust laws.
US District Judge Jeremy Kernodle, based in Tyler, Texas, agreed to dismiss only three of the 21 allegations in the lawsuit, which also names major institutional investors State Street and Vanguard.
This case stands out as one of the most significant legal actions targeting corporate initiatives focused on environmental, social, and governance (ESG) objectives.
The companies involved did not provide immediate comments on the ruling.
Judge Kernodle’s decision allows the states to continue pursuing claims that the asset managers breached US antitrust laws by participating in Climate Action 100+, an investor coalition dedicated to addressing climate change, and leveraging their shareholder influence towards that end.
The asset management firms have refuted the allegations, labeling the lawsuit as “half-baked.” However, the states’ arguments received backing from antitrust officials appointed during the Trump administration, including those at the Department of Justice and the Federal Trade Commission.
The implications of this lawsuit may significantly affect how these companies, which manage a combined total of about $27 trillion, manage their investments and passive funds.
One of the remedies sought by the plaintiffs could involve requiring the asset management firms to pull investments from coal companies. BlackRock has expressed concerns that such actions would negatively impact these companies’ access to capital and potentially drive energy prices higher.
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