Attorney General Brenna Bird, along with a coalition of 13 attorneys general, has reached a settlement with The Vanguard Group in an ongoing multistate lawsuit involving major asset managers BlackRock, State Street, and Vanguard. The lawsuit targets practices that allegedly increased the cost of coal and electricity across the United States by challenging what it describes as a BlackRock-led group that raised electricity prices under “green energy” investing.
According to the agreement, Vanguard will allow its investors to vote their own shares—an industry first. This measure is intended to address concerns about coordinated market manipulation based on ideological motives and aims to ensure competitiveness and lower costs in the coal industry. The settlement also sets new standards for institutional investor conduct.
The lawsuit alleges that BlackRock’s actions resulted in significant profits for itself and other involved parties while increasing electricity prices nationwide. It has received support from both the Department of Justice and Federal Trade Commission during President Trump’s administration through a joint statement of interest.
“Iowans should not have to pay higher prices for energy because of woke Wall Street agenda,” said Attorney General Bird. “I’m grateful that Vanguard has chosen to set higher standards for the industry and has agreed to resolve this case. We’ll set our sights on BlackRock and State Street now and continue to fight for truly competitive markets to help Iowans and all Americans.”
As part of the settlement terms, Vanguard will refrain from using its holdings to influence business strategies or push companies toward environmental, social, or governance (ESG) goals over profitability. Specifically, it will not direct portfolio company strategies, threaten divestment unless ESG priorities are met over company interests, or nominate directors or shareholder proposals based on these objectives. Additionally, Vanguard will pay $29.5 million to participating states.
Vanguard also committed to providing proxy voting rights for investors in funds representing at least half of its U.S.-equity assets under management. This change is designed so customers can directly express their views regarding company decisions such as prioritizing profitability versus ESG goals.
Texas led this legal action with Iowa joining alongside Alabama, Arkansas, Indiana, Kansas, Louisiana, Missouri, Montana, Nebraska, Oklahoma, West Virginia, and Wyoming.
