Nebraska Attorney General joins multistate coalition in landmark settlement with Vanguard over investor rights and energy markets

Lincoln, Nebraska – In a sweeping move that could reshape how large investment firms operate and influence energy markets, Nebraska Attorney General Mike Hilgers joined a 13-state coalition in securing a historic settlement with The Vanguard Group, Inc. The agreement resolves part of a multistate lawsuit targeting major asset managers BlackRock, State Street, and Vanguard, and it marks what officials describe as a first-of-its-kind enforcement action addressing coordinated ESG-driven market behavior.

The settlement introduces significant changes to Vanguard’s practices. Most notably, the company agreed to make strong passivity commitments and expand proxy voting rights for investors — a step state officials say empowers shareholders and restores control over how their investments are used.

Settlement Aims to Address Market Influence and Energy Costs

The lawsuit alleges that coordinated actions led by BlackRock formed a cartel that worked to restrict coal production and raise prices under the banner of environmental, social, and governance initiatives. According to the coalition, these actions contributed to higher electricity costs for consumers across the United States while generating large profits for the companies involved.

Officials argue the legal effort is designed to lower the cost of coal and, in turn, reduce electricity prices nationwide. The complaint also alleges that BlackRock misled investors who believed they were placing funds in non-ESG investment products.

The legal action has drawn support from federal regulators. The U.S. Department of Justice and the Federal Trade Commission filed a joint statement of interest supporting the case, highlighting the broader national implications surrounding competition, transparency, and investor protections.

Attorney General Hilgers praised the outcome and emphasized its impact on investor choice and energy policy.

“Vanguard has chosen to do the right thing by empowering its investors to exercise choice in proxy voting. No longer will investors be forced to advance the radical ESG agenda. Vanguard’s innovative approach protects investors and lets them decide how to vote their shares, giving investors the opportunity to prioritize profits over left-wing policies,” said Attorney General Hilgers. “Today’s settlement is especially great news, given the increased demand for energy that the artificial intelligence revolution is bringing. Unleashing American energy means embracing coal as an essential component of powering the future, and I will continue fight unlawful attempts by the woke left to destabilize American energy dominance.”

Key Changes Required Under the Agreement

Under the terms of the settlement, Vanguard agreed not to impose ESG goals over customers’ profitability. The firm will not use its shareholdings to direct business strategies, pressure companies by threatening to withdraw investments, or nominate directors or shareholder proposals to influence company actions.

The agreement also requires Vanguard to provide proxy voting opportunities to investors in funds representing at least 50 percent of assets invested in U.S. equity funds it advises. This provision allows investors to weigh in on corporate decisions, including whether companies should prioritize profitability or other objectives.

In addition to policy changes, Vanguard will pay $29.5 million to the plaintiff states.

Multistate Coalition Signals Broader Policy Shift

Nebraska joined a Texas-led coalition in the lawsuit alongside attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Oklahoma, West Virginia, and Wyoming. The coordinated legal effort reflects growing scrutiny of how large institutional investors influence corporate policies and energy markets.

State leaders involved in the case argue the settlement restores competition and protects industries that remain central to the nation’s energy supply. They also contend that the agreement sets a new precedent for institutional investors by redefining the limits of shareholder influence and strengthening investor choice.

Supporters say the settlement is particularly significant as the United States faces rising energy demand driven by expanding technology and artificial intelligence infrastructure. By ensuring coal remains competitive and preventing coordinated market pressure, officials believe the agreement helps stabilize energy costs and supports domestic energy production.

The case against BlackRock and State Street continues, but the agreement with Vanguard signals a major milestone in the broader legal effort. For policymakers and investors alike, the settlement represents a turning point in the debate over ESG policies, shareholder rights, and the future of American energy markets.