No one who cares about America’s energy future argues that the big investment firms that withheld capital from the coal industry to meet their Environment-Social-Governance goals deserve condemnation.
Their moral preening meant higher energy prices for Americans and a threat to the high-paying jobs and consistent source of energy that the coal industry provides.
But the coal industry has received a lifeline, courtesy of President Donald Trump’s Day 1 “Unleashing American Energy” executive order, which called for an all-of-the-above energy policy that encourages production of all available fuels to meet the fast-growing demand.
Now, as these big investment firms are backing off the DEI and ESG policies that harmed the coal industry so much, another threat has materialized. Ken Paxton of Texas and 10 other GOP state attorneys general have filed a lawsuit against Blackrock, State Street and Vanguard.
The suit claims the firms violated federal antitrust law by forcing the coal companies to reduce output so the investment firms could meet their ESG goals. The suit contends this amounts to collective influence being used to pressure American coal companies, such as Peabody Energy and Arch Resources, to take actions that reduced their profitability. The suit also calls for the named firms to divest from coal.
“Texas will not tolerate the illegal weaponization of the financial industry in service of a destructive, polarized ‘environmental’ agenda,” Paxton said in a release about the lawsuit. “Their conspiracy has harmed American energy production and hurt consumers.”
But what if they’ve stopped? What if this actually isn’t much of a problem anymore? What if this lawsuit actually does more harm than good to consumers and President Trump’s energy agenda? Increasingly, voices on the right are saying the answers to these questions, and thus the lawsuit itself, might be problematic.
Coal market rigging is so 2024. Blackrock is undertaking an “ongoing review of our global practices” in light of President Trump’s orders on DEI and ESG and “will adapt” to changing laws. It has folded its DEI program into a “Talent and Culture” group and no longer requires managers to interview a diverse slate of candidates for each job.
Meanwhile, many on the right are concerned the lawsuit could encourage the big investment firms to back out of the coal industry, leaving it starved for funding at a time when America needs its energy the most.
“Though I’m generally supportive of ensuring companies are not influencing certain types of energy investments, this lawsuit by 11 GOP AGs would actually force divestment from coal – the opposite of what we want in an “above all” energy market,” wrote George Landrith, president of the free-market think tank Frontiers of Freedom, on X.
“Plus these asset managers have openly moved away from ESG, dropping different climate commitments and funds. This suit feels unnecessary and problematic because demand for energy is increasing. To keep up, we need investments in all forms of energy – including coal.”
In fact, Landrith wrote, the AGs should reconsider this suit “unless they want to help out the environmentalists that have been pushing for the end of coal for years. To meet POTUS’s goal of American energy dominance, we need fewer political lawsuits & more energy investment.”
The heart of these 11 AGs is in the right place. The big investment firms do deserve punishment for limiting the output of these firms that were trying to provide the energy security all Americans depend on – all for radical-left goals that even they don’t adhere to anymore.
But the reality is this could scare investment away from coal firms at the time they need it most. If these AGs want to protect America’s energy supply, they will stand down and let the coal industry and its biggest investors settle their own scores.
“Thankfully the tide is turning,” wrote Rep. Tim Huelskamp, R-Kansas, on X. “Major institutions are backing away from extreme ESG groups like @NetZeroWatch, @ActOnClimate100 after conservative pressure. And while I support the recent lawsuit by 11 GOP AGs against asset managers pushing green energy, I’m concerned about the suit forcing coal divestment. We need more investment in energy, not less. Divestment is the goal of the enviro left, not ours.”
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