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Yahoo
3 days ago
- Business
- Yahoo
The Lone Star State — and Trump — versus BlackRock
The Trump administration has waded into a politically charged Texas-led legal fight to dilute US financial giants' alleged influence over corporate America. Last week, the US Justice Department and the US Federal Trade Commission filed a joint "statement of interest" siding with Texas Attorney General Ken Paxton and 10 other Republican-led states in an antitrust case against trillion-dollar asset managers BlackRock (BLK) and its rivals State Street (STT) and Vanguard. The charge: Using their substantial stock holdings, BlackRock and its rival financial firms coordinated a "left-wing ideological" attack on US coal companies, pressuring coal producers Arch Coal, Black Hills, and Peabody to cut coal production in the South Powder River Basin and thermal coal markets, the DOJ and FTC said in the court filing. The decreased output, they said, harmed US consumers by artificially inflating energy prices. "Carbon reduction is no more a defense to the conduct alleged here than it would be to price fixing among airlines that reduced the number of carbon-emitting flights," the DOJ and FTC said in the statement supporting the states' claims. The states allege that the financial firms agreed to reduce output through commitments to carbon-reduction organizations Net Zero Asset Managers Initiative and Climate Action 100+. They also say disclosures from the defendants and public statements show that they engaged directly with coal company executives in efforts to influence production levels, and they used their voting power when engagement fell short of meeting those goals. As large yet minority shareholders, the complaint claims, the defendants have more influence than their formal equity share. The actions extend beyond shareholder advocacy and passive investing by furthering their own "green energy" or net-zero goals, rather than the goals of the coal corporations, in violation of Section 1 of the Sherman Act and Section 7 of the Clayton Act, the challengers claim. The agencies' effort to have the administration's perspective considered in the case, despite not being a party to the dispute, has drawn criticism from the defendants and others. On Wednesday, Campaign for Accountability (CfA), a nonpartisan nonprofit watchdog organization, accused the administration of targeting the money managers for political rather than law enforcement reasons. The group filed a Freedom of Information Act Request asking the agencies to disclose communications underlying their decision to weigh in on the case. CfA was co-founded in 2015 by Anne Weismann, former head counsel for the watchdog group Citizens for Responsibility and Ethics in Washington. "This case isn't about antitrust law, but about conservative opposition to even recognizing the risks of climate change," CfA executive director Michelle Kuppersmith said. "Americans deserve to know who is influencing the FTC to use its antitrust authority to attack political opponents." Meanwhile, Derek Mountford, an antitrust partner at Gunster, said the lawsuit's rhetoric also signals political motivation. But, he added, it could ultimately answer an unsettled antitrust question over how competition law applies to the actions of asset managers with significant ownership interests in competing companies. Should asset managers and index fund providers, for example, be treated differently under the law than individuals and businesses that offer products and services and control multiple firms within a singular market? "If one individual owns a significant interest in three competing companies, alarm bells start going off in your head that there could be some anticompetitive conduct going on," Mountford said. Although the BlackRock scenario isn't as cut and dried, he said, concerns have been bubbling about the competitive role that institutional shareholders are allowed to play, compared to companies and suppliers that can more directly influence market competition. "This case is going to represent a much clearer answer to that question than I think we've gotten in any other case of its kind," Mountford said. BlackRock asked for a judge to dismiss the case and accused the administration of trying to "re-write" antitrust law under an "absurd" theory that the coal companies conspired with them to reduce production outputs. "Forcing asset managers to divest from coal companies will harm their ability to access capital and invest in their businesses and employees, likely leading to higher energy prices," the company said in a statement. BlackRock CEO Larry Fink made a series of disengagements from the company's environmental, social, and governance (ESG) initiatives as bipartisan concerns spread over the financial giant's power to sway US markets. Fink publicly stated in June 2023 that he would cease using the politically sensitive acronym "ESG" because it had been "weaponized" by both the ideological right and the left. In January, before President Trump took office, the financial giant cut ties with UN-backed Net Zero Asset Managers Initiative (NZAM), an environmental advocacy group that pledged net-zero carbon emissions by 2050. The administration's legal filing came roughly six months after a GOP-controlled House Judiciary Committee issued a report accusing the three money managers of using their financial clout to force US coal companies to "decarbonize" and reach net zero. According to the report, the money managers forced coal companies to disclose and reduce carbon emissions through negotiations, stockholder proxy resolutions, and the replacement of directors at "recalcitrant companies." Democrats have also criticized the financial firms' outsized influence over US markets, but for different reasons. Sen. Bernie Sanders (D-Vt.), a vocal critic of the megamanagers' influence, described the group's stock ownership in 95% of S&P 500 (^GSPC) companies an "oligarchy." Sanders, along with Sen. Elizabeth Warren (D-Mass.) also criticized BlackRock for declining to use its weight to intervene in a coal mining labor dispute. Gunster's Mountford said the federal government's decision to weigh in on a state AG-initiated case is unusual but becoming increasingly more prevalent. "It's not something that courts have had to wrestle with, where you have the DOJ weighing in on these types of cases," he said. "It's a pretty new phenomenon, and it's one that Trump sort of pioneered ... and continued during the Biden administration." "I think," he added, "it's here to stay." Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
Yahoo
19-04-2025
- Business
- Yahoo
Energy regulator grants BlackRock renewed authorization for large utility investments
This story was originally published on ESG Dive. To receive daily news and insights, subscribe to our free daily ESG Dive newsletter. The Federal Energy Regulatory Commission gave BlackRock reauthorization to acquire up to 20% of voting securities for certain public utility companies on Thursday, despite some concerns about the asset manager's role in those companies and its prior climate commitments. The renewal extends BlackRock's blanket authorization for another three years — an extension that was protested by states, the non-profit Consumers' Research and others. The groups claimed that BlackRock was an active investor and the climate alliances it was previously a member of qualified as holding companies, according to the April 17 reauthorization letter. The nation's largest asset manager said such claims 'lack merit.' FERC ultimately found the states' argument that sustainability-focused groups such as Climate Action 100+ and the United Nations-backed Net-Zero Asset Managers initiative qualify as holding companies 'unpersuasive.' To support its case for reauthorization, BlackRock said that it is managing approximately $52 billion in investments in approximately 54 companies that fall under its current authorizations, and that opponents' claims would 'limit investment in the energy industry.' A BlackRock spokesperson told ESG Dive Thursday via email that the asset manager appreciates FERC's approval and 'thank[s] them for their engagement.' 'At a time when energy affordability and reliability are especially important, we look forward to continuing to provide billions of dollars in capital for the American energy sector on behalf of our clients,' the spokesperson said. BlackRock's prior blanket authorization allowed the asset manager to acquire Global Infrastructure Partners for $12.5 billion last year, despite protests from consumer advocacy, private equity and environmental nonprofits. BlackRock cited the Commission's prior decision for the GIP case in its reauthorization case, which included determinations that the firm does not exercise control over the holdings and has acted in line with the authorizations, and the authorization has not led to adverse effects on competition. BlackRock also pointed to its tendency to vote with management during proxy season, as well as its voting record on environmental, social and governance topics in recent years. The asset manager said over the past three years it has not supported any environmental or social proposals at traded utilities and supported just 4% of environmental and social proposals in the most recent proxy season. Additionally, while the states challenging the reauthorization held that climate alliances like CA100+ and NZAM should be considered 'horizontal organizations' and 'holding companies,' FERC said it disagrees with that representation of the organizations, noting that 'neither owns shares in public utilities or holds any voting rights or other ownership interests.' Twenty states challenged the reauthorization: Arkansas, Arizona, Florida, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia and Wyoming. 'And, in any event, we note that Blackrock represents that it is no longer a member of either organization,' FERC wrote. BlackRock withdrew from NZAM at the beginning of this year — leading the initiative to suspend operations — and transferred its CA100+ membership to a smaller international arm last year. Despite the approval, FERC Chairman Mark Christie said in a concurrence that he maintains concerns that BlackRock could use its ownership of 'competing assets to exert market power.' Christie also shared the states' concerns about BlackRock's and other large asset managers' participation in investor advocacy organizations. 'We are faced with the reality that public utilities face already large and still growing capital needs, including to fund investment in greatly needed utility assets, such as power generation,' Christie wrote. 'It is a fact of economic life that public utilities regulated by the Commission must seek investment capital from wherever it is available, and much of it is now either owned or managed by huge asset managers.' The FERC Chair said that though he supports extending the reauthorization, he said it comes with a 'compelling need for continued vigilance over BlackRock's actions during this period.' Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Amundi Readies for Broader Mandate Shift After State Street
(Bloomberg) -- Amundi SA is positioning itself for a realignment in investor flows triggered by a growing divide in how asset managers on either side of the Atlantic handle stewardship and climate policies. They Built a Secret Apartment in a Mall. Now the Mall Is Dying. Chicago Transit Faces 'Doomsday Scenario,' Regional Agency Says Why Did the Government Declare War on My Adorable Tiny Truck? LA Faces $1 Billion Budget Hole, Warns of Thousands of Layoffs New York Subway Ditches MetroCard After 32 Years for Tap-And-Go There are already signs that a number of asset owners across Europe are currently conducting reviews of their US mandates, said Jean-Jacques Barbéris, head of institutional and corporate division and ESG at Amundi. Europe's largest asset manager, which won business from State Street earlier this year, expects the broader reassessment underway to play out over several months, he said. 'We do see some indications that some investors are reviewing what they do with some American asset managers because of responsible investment alignment,' Barbéris told Bloomberg. Money management is becoming the latest stage on which transatlantic tensions are now playing out. So far this year, State Street has lost mandates in the UK and Scandinavia amid concerns it no longer does enough to address climate change. BlackRock Inc. faces similar challenges, with PME in the Netherlands saying it's in the process of reviewing a €5 billion ($5.4 billion) mandate over climate concerns. Barbéris said the People's Pension, a UK pensions manager that reassigned £28 billion ($36.3 billion) worth of mandates to Amundi and Invesco Ltd. earlier this year, first approached the Paris-based firm about a year ago, shortly after State Street said it was pulling out of Climate Action 100+. State Street is just one of a number of major US asset managers to have exited CA100+, which is the world's largest investor coalition dedicated to addressing global warming. Others that have walked away include BlackRock, Pacific Investment Management Co., as well as the asset management arms of Goldman Sachs Group Inc. and JPMorgan Chase & Co. For much of the US investment industry, continued membership has become untenable as firms adapt to a political reality in which net zero targets have been called 'a sinister goal' by US Secretary of Energy Chris Wright. Firms that don't conform face bans in Republican-led states, as well as lawsuits. But as US asset managers adapt to politics at home by scaling back their climate commitments, investors in Europe are taking note. According to data provided by Morningstar Direct, funds domiciled in Europe and identified as pursuing environmental, social and governance goals attracted an estimated $3.5 billion of inflows in the first two months of the year. In the US, meanwhile, such funds suffered about $3.1 billion of client outflows in the same period. 'The anti-ESG backlash and regulatory uncertainties on both sides of the Atlantic are the biggest drivers of this trend,' said Hortense Bioy, head of sustainable investing research at Morningstar. Asset managers' support for ESG resolutions at annual general meetings hit a low last year, according to a February report by the nonprofit ShareAction. The world's largest asset managers including State Street and BlackRock supported just 7% of key shareholder resolutions, the advocacy group said. US money managers are now navigating a political landscape in which they can be blacklisted from either side of the ESG debate. Late last year, BlackRock, Vanguard Group Inc. and State Street were all sued by a group of states led by Texas for allegedly breaking antitrust law by adopting environmental strategies that hurt the supply of coal. The suit alleges that those investment policies drove up electricity prices. Barbéris said European institutional investors almost always ask about stewardship and engagement when they approach an asset manager to inquire about handling a mandate. It is a 'material' criterion in their decision-making process, he said. 'We have a lot of questions from clients at the European level asking us: 'We see some announcement that has been done by others, what do you do on your side? Have your commitments changed or not?' So I think there is pro-activity among clients at the moment,' he said. Against that backdrop, Amundi is now choosing to be 'vocal about what we're doing and explaining that it's in the interest of our clients and on behalf of what our clients are saying,' Barbéris said. 'From a business perspective, it's much more convincing vis-a-vis institutional clients that are long-term oriented players to demonstrate consistency.' And that's how 'we can probably attract additional business,' he said. (Adds reference to Texas suit in 11th paragraph.) A New 'China Shock' Is Destroying Jobs Around the World How TD Became America's Most Convenient Bank for Money Launderers The Richest Americans Kept the Economy Booming. What Happens When They Stop Spending? Tesla's Gamble on MAGA Customers Won't Work One Man's Crypto Windfall Is Funding a $1 Billion Space Station Dream ©2025 Bloomberg L.P. Sign in to access your portfolio
Reuters
18-03-2025
- Business
- Reuters
Investor co-leading climate talks with Equinor calls time, sells out
LONDON/OSLO, March 18 (Reuters) - One of the asset managers co-leading climate talks with Equinor ( opens new tab on behalf of more than 600 investors said it has sold its stock because the oil major's board failed to align its strategy with the world's goal of limiting global warming. After first investing in Equinor in 2021, Britain's Sarasin & Partners helped lead talks with the company as part of the Climate Action 100+, opens new tab initiative, whose members push the world's largest listed corporate polluters to cut emissions. here. Despite originally seeing Equinor as a "potential leader in the energy transition" that would "set a standard for the industry", a March 14 letter to the company seen by Reuters said it had failed to align its strategy with the Paris Agreement. That landmark deal, agreed by countries including Equinor's majority owner Norway, seeks to limit the global average temperature increase to well below 2 degrees Celsius above the pre-industrial average by mid-century, and ideally 1.5 degrees. Despite making statements supporting such a pathway, "Equinor has not revised its strategy to deliver on these", the letter to Equinor Chairman Jon Erik Reinhardsen said. "Instead of leading the transition, Equinor has followed other oil and gas majors in rolling back its efforts," it said, including by lobbying to expand oil and gas production, and cutting its renewable energy target in February. Sarasin co-filed a shareholder resolution in 2024 asking Europe's biggest supplier of natural gas to align with a 1.5-degree pathway, yet it was successfully opposed by the board. The asset manager said in its letter that it was particularly troubled by Equinor's view that it was already aligned with the 1.5 degrees Celsius climate goal, calling the claims "not credible". "It is clear from public statements that Equinor assumes it could become aligned if the world transitions more quickly, but this is a fundamentally different position from actually supporting such a pathway today," it said. Sarasin's holding peaked at around 9.5 million shares in March 2024, making it among the company's 20-biggest investors, before it began reducing its position in May. When it sold out in January, it had around 3 million shares.
Bloomberg
27-02-2025
- Business
- Bloomberg
UK Pension Moves £28 Billion to Amundi, Invesco Citing ESG
UK pension master trust the People's Pension has awarded two mandates totaling £28 billion ($35.5 billion) to Amundi SA and Invesco Ltd., citing their sustainability and responsible investment credentials. The People's Pension has awarded £20 billion of assets to Amundi to passively invest in developed market equities, while Invesco will take over £8 billion in active fixed income investments, according to a statement Thursday. The mandates were previously overseen by State Street, which is among several Wall Street giants that have quit the Climate Action 100+ coalition that pushes companies to reduce carbon emissions.
