Montana’s Coal Future is Brighter Than Ever After Vanguard Settlement

Montana Attorney General along with nine other states (AL, AK, IN, IA, KS, MO, NE, TX, WY) are celebrating a win for the coal industry as a result of a huge settlement with Vanguard.

The settlement stems from a 2024 lawsuit accusing Vanguard, BlackRock, and State Street using their stock ownership in major U.S. coal companies to pressure them into cutting production.

A Win for Montana's Coal Industry

According to a release from Montana AG Austin Knudsen, a lawsuit was filed by Knudsen against Vanguard, BlackRock, and State Street alleging their goal "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."

The lawsuit alleged that this led to higher coal and electricity prices for Montana consumers in the process.

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Of the three, Vanguard is the only to settle the lawsuit and did so for a hefty $29.5 million. According to Knudsen's press release, that money will sit in escrow "until a later date."

"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."

The Terms of Vanguard's Settlement with Montana

In addition to the $29.5 million Vanguard will pay to the states, they've also agreed to not use shareholdings to force portfolio companies to change business strategies, threaten withdrawal, nominate directors, or push shareholder proposals aligned with "environmental, social, and governance (ESG) goals" over profits.

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Vanguard will also provide enhanced proxy voting options in U.S. equity funds (for at least 50% of assets), which gives the investors the power to direct votes toward profitability rather than ESG priorities.