BlackRock together with Vanguard and State Street filed a motion at the federal court to dismiss the antitrust lawsuit which they called “unprecedented, unsound and unsupported.”
The lawsuit initiated by Texas and twelve other states claims that asset managers BlackRock and Vanguard and State Street have used their climate-focused shareholder activism to manipulate energy markets and increase utility costs. The states claim these firms used their proxy voting authority to force coal companies to reduce production while maintaining their investments in fossil fuels.
BlackRock attorney Gregg Costa from Gibson Dunn explained to the court that the plaintiffs lacked sufficient evidence to demonstrate market competition harm. The court heard that there existed no evidence showing companies worked together to control output decisions or used proxy votes to limit market competition according to Costa.
The states’ attorneys maintained that any mention of climate issues by these companies could lead to changes in corporate strategic decisions. According to Brian Barnes of Cooper & Kirk who represents the states “Jawboning by these defendants about market strategy clearly has the potential to influence output decisions.”
The decision will determine how major asset managers handle shareholder advocacy regarding climate change because they control approximately $27 trillion in assets.
