MONTGOMERY, Ala. (WDNews) — Alabama Attorney General Steve Marshall announced a $29.5 million settlement with The Vanguard Group in a lawsuit over environmental, social and governance investing practices.
Marshall said the agreement resolves Alabama’s claims against Vanguard in a Texas-led multistate lawsuit first filed in November 2024. The lawsuit alleges that Vanguard and other asset managers used customer investments to advance environmental goals that affected the coal industry and increased energy costs.
“Wall Street has no business using working people’s retirement accounts to wage war on American energy,” Marshall said. “When you hand your retirement to an investment firm, you’re trusting them with your family’s future, not handing them a political blank check.”
The lawsuit also names BlackRock and State Street as defendants. According to the coalition of attorneys general, the companies engaged in anticompetitive actions that allegedly restricted coal production and harmed energy markets.
Under the settlement, Vanguard agreed it will not use its shareholdings to direct business strategies of portfolio companies, threaten to withdraw investments to influence decisions, or nominate directors or shareholder proposals tied to specific business actions.
Vanguard will also offer proxy voting rights to investors in funds representing at least 50% of assets invested in U.S. equity funds it advises. State officials said this move gives customers more control over how their shares are voted on company matters.
In addition to the policy changes, Vanguard will pay $29.5 million to the participating states.
Marshall said litigation continues against BlackRock and State Street.
