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US to support Republican state's argument in BlackRock Climate Case

Two sources familiar with this matter said that U.S. antitrust enforcers would likely support Republican state arguments on Thursday accusing asset managers BlackRock Vanguard State Street of conspiring to reduce coal production through climate activism.

The U.S. Department of Justice, and the Federal Trade Commission are expected to file an interest statement in the case in which Texas and 12 other States claim that the companies used their significant holdings in U.S. Coal companies to discourage the competition.

This is a major political setback for asset managers. BlackRock, Vanguard, and State Street, which together have $27 trillion, are under fire by conservative Republicans from states that produce energy. They claim the firms put social and environmental concerns ahead of maximising returns for customers.

The asset managers' spokespeople did not respond immediately to comments.

BlackRock is, for example, facing restrictions or outright bans from managing public assets in Texas and Indiana due to its ESG policies. In February, there were signs of thawing when BlackRock led a consortium that bought ports near the strategically important Panama Canal waterway. The deal was hailed as a success by U.S. president Donald Trump.

Asset managers call the case "half baked" and claim there is no proof that they demanded a reduction in output. U.S. district judge Jeremy Kernodle, in Tyler, Texas is set to hear arguments in June on the asset manager's bid to dismiss the lawsuit. Reporting by J. Godoy, Ross Kerber and Chris Sanders; Editing and Matthew Lewis by Chris Sanders)

(source: Reuters)