Big Three Under Fire Over Coal
Welcome to News Brief, a round up of some of Ignites' top stories of the past week.
Eleven Republican-led states, including Texas, have?sued?BlackRock,?State Street?and?Vanguard, claiming the trio conspired to constrict the coal market through anti-competitive trade practices. The states argue that the fund complexes used the?Climate Action 100+?group and?Net Zero Asset Managers Initiative?to reduce the use of coal and ultimately drive up the cost of electricity, Ignites'?Sabrina Kharrazi?reports.
Vanguard?quit?the Net Zero Asset Managers Initiative in 2022, but BlackRock and SSGA remain signatories, the group's website shows.
SSGA, meanwhile, left Climate Action 100+ early this year, and BlackRock transferred its membership to the asset manager's international affiliate.
The three firms own large stakes of the coal companies through their funds. The injunctive relief the plaintiffs requested could include forcing the firms to divest their coal holdings.
Also last week, President-elect?Donald Trump?said he would?nominate?outgoing U.S. Rep.?Lori Chavez-DeRemer?as labor secretary. If her track record is any indication, the?Labor Department's rule allowing fiduciaries to consider environmental, social and governance investments in retirement plans could be in jeopardy,?David Isenberg?reported. Chavez-DeRemer twice has voted for legislation that would overturn the rule, which was?finalized?in 2022. In addition, it isn't clear if or how she will handle any rules regarding fiduciaries, attorneys told Ignites. The DOL's most recent version of the fiduciary rule is held up in the courts.
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J.P. Morgan?last week became the 35th fund shop to ask the?Securities and Exchange Commission?for permission to use the multi-share-class structure pioneered by?Vanguard. The New York-based firm wants to roll out mutual fund share classes of ETFs, as well as ETF share classes of its mutual funds, Ignites'?Beagan Wilcox Volz?reported. The SEC hasn't yet weighed in on any of the applications since?Perpetual's U.S. division made the first such request in February 2023.
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