Federal Antitrust Enforcers Challenge Asset Managers Over Coal Operations

The U.S. Department of Justice and Federal Trade Commission have thrown their weight behind Republican states accusing asset managers BlackRock, Vanguard, and State Street of conspiring to reduce coal output through climate activism. This development intensifies a high-stakes case that questions how freely these firms may operate with their massive $27 trillion under management.

The three asset managers have denied any wrongdoing, describing the lawsuit as "half-baked." Despite having previously scaled back their focus on climate and social issues, significant investments remain in fossil fuels. The DOJ and FTC, however, urged a Texas judge to dismiss claims of exemption under passive investor protection laws, citing conduct that purportedly raised U.S. energy prices.

Both the DOJ and FTC argue that the alleged efforts to reduce coal output clearly violate antitrust laws. This stance challenges President Donald Trump's aim for American energy dominance, prompting BlackRock to claim that divesting from coal, as proposed, would limit capital access and inflate energy costs.

(With inputs from agencies.)