Attorney General Hanaway and States Coalition Reach Agreement with Vanguard to Safeguard …

Missouri Attorney General Catherine Hanaway has announced a groundbreaking settlement between a coalition of 13 states and The Vanguard Group, Inc. This agreement is part of their lawsuit against asset managers BlackRock, State Street, and Vanguard. Vanguard has agreed to implement the strictest passivity commitments in the industry and provide proxy voting rights to its investors, a first for the industry.

Hanaway emphasized the significance of this agreement in safeguarding American investors from green energy scams that threaten the stability of energy markets. She denounced the intrusion of environmental, social, and governance (ESG) factors and radical social agendas into the business marketplace. The Attorney General expressed her commitment to holding accountable asset managers who place ESG considerations above the interests of American consumers, especially those reliant on coal power.

The lawsuit is aimed at combatting a BlackRock-led investment cartel that inflated the price of coal under the guise of promoting green energy. This manipulation resulted in increased electricity costs for consumers nationwide while generating substantial profits for BlackRock and its accomplices. Moreover, BlackRock misled thousands of investors who chose to invest in non-ESG funds.

The settlement signifies a significant development in the fight against coordinated ESG-driven market manipulation. It ensures the competitiveness and affordability of the coal industry while setting a new standard for the conduct of large institutional investors. Vanguard, as part of the agreement, has committed to refraining from imposing ESG objectives at the expense of its customers’ profitability.

As part of the settlement terms, Vanguard will pay $29.5 million to the states involved in the lawsuit. Additionally, Vanguard will introduce proxy voting for investors in funds representing at least half of the assets invested in U.S. equity funds it advises. This enables Vanguard’s clients to voice their opinions on the business decisions of portfolio companies, including the prioritization of profitability over ESG or other objectives.

Alongside Missouri, attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Montana, Nebraska, Oklahoma, Texas, West Virginia, and Wyoming have joined as plaintiffs in this collective effort to protect the interests of American investors and consumers. The settlement marks a significant milestone in holding asset managers accountable for their actions and promoting transparency and fair practices in the investment industry.