Texas Attorney General Ken Paxton and several other Republican state AGs are taking action against financial asset managers, but energy policy experts worry it will hurt the American coal industry.
Last fall, Paxton and 10 other Republican AGs filed an antitrust lawsuit against Vanguard, BlackRock and State Street alleging the asset management companies violated federal antitrust law, and the firms’ combined holdings in publicly traded American coal companies like Peabody Energy and Arch Resources are tantamount to collective influence.
The GOP attorneys general say these firms abused their influence to pressure coal companies to cut output to meet ESG (Environmental, Social and Governance) targets.
“Texas will not tolerate the illegal weaponization of the financial industry in service of a destructive, politicized ‘environmental’ agenda. BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices,” Paxton said in a news release last November. “Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of State and federal law.”
But energy insiders warn the lawsuit will hurt the coal industry by starving it of much-needed capital; they fear the lawsuit also will result in increased legal costs.
Energy experts say the AGs’ actions will cause asset managers to divest from coal companies, pulling billions invested from the sector. They argue it would reduce the value of these companies’ stocks and limit the industry’s ability to attract external funding.
George Landrith, the president of the free-market think tank Frontiers of Freedom, said the lawsuit is unnecessary, as companies back away from ESG under the Trump administration.
“Though I’m generally supportive of ensuring companies are not influencing certain types of energy investments, this lawsuit by 11 GOP AGs would actually force divestment from coal – the opposite of what we want in an ‘above all’ energy market,” he posted on X. “Plus, these asset managers have openly moved away from ESG, dropping different climate commitments and funds. This suit feels unnecessary, and problematic, because demand for energy is increasing. To keep up, we need investments in all forms of energy – including coal.
“These AGs should reconsider their suit unless they want to be helping out the environmentalists that have been pushing for the end of coal for years…,” he added. “To meet POTUS’ goal of American energy dominance, we need fewer political lawsuits & more energy investment.”
U.S. Rep. Tim Huelskamp, R-Kansas, also worries the lawsuit will hurt coal investment.
“Thankfully, the tide is turning,” he posted on X. “Major institutions are backing away from extreme ESG groups like @NetZeroWatch @ActOnClimate100 after conservative pressure. This is a win for energy security & common sense.
“And while I support the recent lawsuit by 11 GOP AGs against asset managers pushing green energy, I’m concerned about the suit forcing coal divestment,” he added. “We need more investment in energy, not less. Divestment is the goal of the enviro left, not ours.”
President Donald Trump has strongly supported the coal industry during his two presidencies. He signed an executive order earlier this year that called coal production vital to American national security.
