ESG Enforcement Tracker

Key facts:

Alabama Attorney General Steve Marshall announced a settlement on 2 March 2026 with The Vanguard Group, Inc., resolving allegations that the firm participated in coordinated efforts to advance environmental objectives at the expense of investor returns.

This matter forms part of a Texas‑led multistate antitrust lawsuit filed in November 2024 against Vanguard, BlackRock, and State Street. The states allege that these asset managers used client assets and market influence to pressure companies within the coal industry to adopt ESG‑aligned strategies. The complaint states that this conduct contributed to increased energy costs by restricting the supply of coal and prioritising environmental goals over profitability.

As part of the settlement, Vanguard agreed it will not use its shareholdings to direct business strategies, threaten the withdrawal of holdings, or nominate directors or shareholder proposals at portfolio companies.

The district court denied motions to dismiss, allowing the antitrust action to proceed against the remaining defendants, BlackRock and State Street.

Attorney General Marshall stated that investment firms should not use “working people’s retirement accounts to wage war on American energy,” noting that investors expect financial performance rather than the pursuit of environmental objectives.

Under the settlement, Vanguard agreed to pay USD29.5 million to participating states. The firm also committed to several behavioural requirements, including:

• Not using its shareholdings to direct portfolio companies’ business strategies.
• Not threatening to withdraw holdings to influence company decisions.
• Not nominating directors or shareholder proposals aimed at advancing ESG goals.
• Offering proxy‑voting options to investors for at least 50% of the assets invested in U.S. equity funds, it advises.
• The settlement specified that Vanguard did not admit to any wrongdoing, and that it was being made “solely for the purpose of avoiding the burden and expense of litigation.”

The settlement resolves the claims brought against Vanguard but does not conclude the broader litigation, which continues against BlackRock and State Street. The district court previously denied motions to dismiss, permitting the multistate action to proceed.