Attorney General Knudsen reaches landmark settlement agreement with Vanguard to protect coal

HELENA – Montana Attorney General Austin Knudsen today announced a landmark settlement agreement with The Vanguard Group, Inc. (“Vanguard”) for conspiring to artificially constrict the coal market through anticompetitive trade practices.

In 2024, Attorney General Knudsen filed a lawsuit against asset managers Vanguard, BlackRock, and State Street Corporation for how they were using their substantial stockholdings in every significant publicly held coal producer in the United States to control the policies of the coal companies, which raised the price of coal and electricity prices in the U.S. The investment cartel’s main objective was to reduce coal output by more than half by 2030 by weaponizing its shares to pressure the coal companies to meet “green energy” goals. Today’s settlement agreement guarantees Vanguard will avoid prioritizing environmental, social, and governance (ESG) goals over its client’s profitability, which is the group’s fiduciary responsibility. The litigation against BlackRock and State Street remains ongoing.

“Vanguard came to the correct conclusion in agreeing to this settlement and honoring its fiduciary responsibility to its clients instead of pushing a woke anti-energy agenda. BlackRock and State Street should follow suit,” Attorney General Knudsen said. “Coal is a huge part of Montana’s economy and our daily lives as we rely on it to power our homes. As Attorney General, I will continue to do everything in my power to ensure America’s energy dominance and that companies are following the law.”

As part of the settlement, Vanguard will not use its shareholdings to (a) direct its portfolio companies’ business strategies, (b) threaten its portfolio companies that it will withdraw from its holdings unless they agree to act (or not act) in some manner, or (c) nominate directors or shareholder proposals to its portfolio companies. Vanguard has also agreed to pay $29.5 million to the states. The money will be held in an escrow account until a later date.

Additionally, Vanguard will offer proxy voting to investors in funds accounting for at least 50% percent of assets invested in U.S. equity funds it advises. This will ensure that Vanguard’s clients can make their voices known on portfolio companies’ business, including whether they want to maximize profitability over ESG or other goals.

Attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Nebraska, Texas, and Wyoming are also part of the lawsuit and settlement agreement.