BlackRock (BLK), Vanguard and State Street (STT) are being sued by Texas and 10 other Republican-led states, claiming that the asset managers violated antitrust laws through climate activism that reduced coal production and increased energy prices.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
The lawsuit filed in federal court is one of the most high-profile legal actions yet that targets efforts by companies to promote environmental, social and governance (ESG) goals related to climate change and sustainability.
The lawsuit accuses BlackRock, Vanguard and State Street of using their influence and involvement in climate advocacy groups to pressure coal companies to reduce their output to lower carbon dioxide emissions from the burning of coal by more than 50% by 2030. Those actions, in turn, drove up consumer utility bills, states the lawsuit.
Fighting Climate Change Initiatives
BlackRock, State Street and Vanguard have a combined $26 trillion of assets under management. The states named in the lawsuit include Alabama, Arkansas, Montana, and West Virginia. Republican politicians are increasingly using U.S. antitrust laws to target companies that advance climate-related goals at the expense of energy production and the free market.
On the flipside, climate advocates argue that assessing environmental risks is essential to assessing what investments are worth. The lawsuit seeks to block BlackRock, Vanguard and State Street from using their investments to vote on shareholder resolutions and take other steps that could undermine coal production. It also seeks civil fines for violating federal antitrust and Texas consumer protection laws.
How and when the lawsuit will be resolved is not yet known. BLK stock has risen 28% this year.
Is BLK Stock a Buy?
The stock of BlackRock has a consensus Strong Buy rating among 15 Wall Street analysts. That rating is based on 13 Buy and two Hold recommendations issued in the last three months. There are no Sell ratings on the stock. The average BLK price target if $1,065.07 implies 4.37% upside from current levels.
