Exclusive-US expected to support Republican states’ argument in BlackRock climate case

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By Jody Godoy and Ross Kerber

(Reuters) -U.S. federal antitrust enforcers were expected to express support on Thursday for arguments wielded by Republican states that accuse asset managers BlackRock, Vanguard and State Street of conspiring through climate activism to decrease coal output, two sources familiar with the matter told Reuters.

The U.S. Department of Justice and Federal Trade Commission were expected to file a statement of interest in the case where Texas and 12 other states claim the companies used their substantial holdings in U.S. coal companies to discourage competition.

The development marks a political setback for the top asset managers. With some $27 trillion among them, BlackRock, Vanguard and State Street have come under fire from conservative Republicans, many from energy-producing states, who say the firms wrongly put environmental and social concerns above maximizing returns for their customers.

Spokespeople for the asset managers did not immediately respond to requests for comment.

BlackRock, for instance, faces restrictions and outright bans on managing public assets in states including Texas and Indiana over its ESG policies. There were signs of thawing relations in February when the company led a consortium to buy ports near the strategic Panama Canal waterway, a deal hailed by U.S. President Donald Trump.

The asset managers have called the case “half-baked” and say there is no evidence they pressed for reduced output. U.S. District Judge Jeremy Kernodle in Tyler, Texas, is scheduled to hear arguments on the asset managers’ bid to dismiss the case in June.

(Reporting by Jody Godoy and Ross Kerber; Editing by Chris Sanders and Matthew Lewis)