Climate Antitrust Litigation Intensifies: BlackRock Derivative Suit Filed as Vanguard Pays $29.5 Million Settlement
- Loes van Dijk
- 5 hours ago
- 5 min read
We saw two significant developments in February in the field of anti-climate antitrust litigation targeting major asset managers. This is a form of climate-related antitrust litigation in which state authorities and/or shareholders challenge whether large asset managers’ coordinated climate stewardship activities unlawfully restrict competition in fossil fuel markets.
A shareholder derivative action has been filed against BlackRock’s leadership in the Eastern District of Texas, and just days later, Vanguard agreed to a $29.5 million multistate settlement resolving separate claims brought by thirteen state Attorneys General. These filings are part of a continuing legal strategy challenging the role of large institutional investors in climate-related stewardship, especially in the United States.
The Derivative Action Against BlackRock’s Directors
On February 9, 2026, a shareholder derivative complaint was filed in the Eastern District of Texas on behalf of BlackRock against its officers and directors (Crognale v Dib). The complaint alleges that, for at least four years, BlackRock used its substantial ownership stakes combined with shareholder activism to suppress coal output across the industry. It describes what it characterizes as a “systematic and coordinated mechanism” operating through proxy voting, board engagement, and participation in investor climate initiatives. According to the complaint, BlackRock publicly committed to a stewardship strategy aligned with achieving net zero emissions by 2050, which, based on the International Energy Agency roadmap it adopted, required coal production to decline by over 58 percent by 2030 (Complaint, pp. 2–3).
The complaint ties these allegations directly to market data. It asserts that between 2019 and 2022, publicly traded coal companies in which the relevant asset managers held substantial stakes reduced thermal coal output by 19.2 percent, from 295.2 to 238.5 million tons, while prices increased 25.52 percent, from $27.54 to $34.57 per ton (Complaint, p. 22). The pleading presents this inverse relationship between output and price as evidence of anticompetitive coordination.
The derivative action is built on the theory that this conduct exposed BlackRock to substantial antitrust risk. It references the separate multistate antitrust case brought by thirteen states alleging violations of § 1 of the Sherman Act and § 7 of the Clayton Act, and notes that the court previously denied in large part the defendants’ motion to dismiss that action (Complaint, p. 6).
The core claim is fiduciary. The directors are alleged to have authorized and overseen conduct that created massive antitrust exposure and reputational risk for the company (Complaint, p. 6). Whether that theory ultimately succeeds will depend on how courts evaluate common ownership, stewardship, and the boundary between legitimate shareholder engagement and unlawful coordination.
Vanguard’s February 25 Settlement
Just over two weeks later, in a separate antitrust action, Vanguard entered into a settlement agreement with the same coalition of thirteen states in the ongoing antitrust litigation pending in the Eastern District of Texas. Under the agreement, Vanguard will pay $29.5 million to resolve the states’ claims (Settlement, p. 2). The settlement expressly states that Vanguard denies wrongdoing and that the agreement does not constitute an admission of liability (Settlement, pp. 1, 5).
The most consequential aspect of the settlement lies in its forward-looking commitments. Vanguard agreed that its stewardship activities for U.S. Vanguard-advised funds will pursue engagement and proxy voting solely to further the financial interests of investors, defined as seeking the best long-term investment returns (Settlement, p. 3). More specifically, Vanguard agreed that it will not direct or attempt to direct the business strategies or operations of portfolio companies and will not advocate that a portfolio company take any particular course of conduct to reduce carbon emissions (Settlement, p. 4). It also agreed to withdraw from PRI and not participate in organizations that advocate for setting specific output or emissions targets or require climate-focused stewardship commitments, including NZAM, Ceres, and Climate Action 100+ (Settlement, p. 4). These commitments will remain in effect for five years (Settlement, p. 6).
Where does Anti-Climate Antitrust Litigation Stand?
Together, these two developments in February show us more about the continued reframing of climate stewardship through an antitrust lens. The derivative suit treats participation in climate-aligned investor initiatives and coordinated stewardship as potential evidence of fiduciary breach. The Vanguard settlement operationalizes “passivity” by imposing concrete restrictions on engagement practices and organizational membership.
What makes this moment significant is not merely the monetary figure. It is the structural shift in legal framing. The theory advanced by the states, and echoed in the derivative complaint, is that common ownership combined with coordinated stewardship across competing companies can function as a mechanism for output restriction. The allegation is not simply that companies reduced production, but that large shareholders used concentrated stakes and coordinated engagement to influence supply decisions across horizontal competitors.
What makes this moment significant is not merely the monetary figure. It is the structural shift in legal framing. The theory advanced by the states, and echoed in the derivative complaint, is that common ownership combined with coordinated stewardship across competing companies can function as a mechanism for output restriction. The allegation is not simply that companies reduced production, but that large shareholders used concentrated stakes and coordinated engagement to influence supply decisions across horizontal competitors.
This raises several unsettled legal questions. As the claim against BlackRock unfolds, we will see how courts will assess common ownership in concentrated industries. Traditional antitrust doctrine focuses on agreements among competitors. Here, the theory relies on influence exerted through ownership stakes and stewardship commitments rather than formal agreements among producers. If courts accept that coordinated investor engagement can substitute for direct competitor agreement, the boundaries of liability may expand.
Moreover, the BlackRock derivative action introduces fiduciary overlay. It reframes climate stewardship not only as a potential antitrust issue, but as a question of loyalty and risk oversight. If exposure to antitrust liability becomes foreseeable in the context of coordinated ESG engagement, boards may face heightened scrutiny. This means that directors will need to demonstrate that stewardship policies are grounded in defensible financial rationales and that antitrust risks are actively monitored.
Then, looking at the Vanguard settlement, this update demonstrates that “passivity” is becoming a negotiated regulatory concept. The agreement defines engagement as permissible only when pursued solely to further long-term financial returns and expressly limits advocacy related to emissions reductions and participation in certain climate-focused organizations. This may influence how other asset managers structure their stewardship frameworks, particularly where common ownership overlaps in concentrated sectors such as energy, mining, or utilities.
More broadly, these developments show a growing tension in the United States between three legal regimes: antitrust law, fiduciary duty, and climate-related governance. Institutional investors have increasingly justified climate engagement as risk management tied to long-term portfolio value. The states’ litigation strategy challenges that premise by characterizing coordinated climate commitments as potential horizontal coordination. The courts will ultimately determine where the line is drawn between legitimate shareholder engagement and unlawful market influence.
These two updates suggest that there is maturation of a litigation strategy that seeks to test the legal limits of climate stewardship. Whether these theories narrow the scope of collective investor initiatives or prompt clearer judicial guidance on common ownership and engagement remains to be seen, but the direction of travel is unmistakable (in the United States).
Cases discussed:
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