Nov 27 (Reuters) - BlackRock ( BLK ), Vanguard and State

Street have been sued by Texas and 10 other

Republican-led states, which said the large asset managers

violated antitrust law through climate activism that reduced

coal production and boosted energy prices.

Wednesday's complaint filed in the federal court in Tyler,

Texas, is among the highest profile lawsuits targeting efforts

to promote environmental, social and governance goals, or ESG.

The defendants were accused of exploiting their market

power and involvement in climate advocacy groups to pressure

coal companies to slash output and reduce carbon emissions from

coal by more than 50% by 2030, driving up consumers' utility

bills.

"Competitive markets -- not the dictates of far-flung

asset managers -- should determine the price Americans pay for

electricity," the states said in the complaint.

BlackRock ( BLK ), State Street and Vanguard together have more

than $26 trillion of assets under management.

None of the companies immediately responded to requests

for comment.

The 11 states also include Alabama, Arkansas, Indiana,

Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia and

Wyoming.

Republicans have long explored using U.S. antitrust laws

to target alleged collusion among investment managers to advance

climate-related goals.

Climate advocates, in contrast, view assessing environmental

risks as essential to assessing what investments are worth.

BIG STAKES IN COAL COMPANIES

The states objected to BlackRock ( BLK ), State Street and

Vanguard allegedly pressuring coal companies for change starting

in 2021.

They also criticized the defendants' membership in the

Net Zero Asset Managers Initiative, which says members are

committed

to complying with all antitrust laws, and BlackRock's ( BLK ) and

State Street's membership in Climate Action 100+.

Vanguard left the Net Zero initiative in 2022, while

BlackRock ( BLK ) and State Street left Climate Action 100+ in February.

But the states said the withdrawals did not negate the

"ongoing and future threat" of continued pressure.

It cited the defendants' investments in nine coal

companies, including combined respective stakes of 34.2% and

30.4% in Arch Resources ( ARCH ) and Peabody Energy ( BTU ), the

largest publicly traded U.S. coal producers.

BlackRock ( BLK ) was also accused in the lawsuit of "actively

deceiving" investors about its non-ESG funds by promising to

dedicate them to enhance shareholder value, when it allegedly

used all its holdings to advance its climate goals.

The lawsuit seeks to block BlackRock ( BLK ), State Street and

Vanguard from using their investments to vote on shareholder

resolutions and take other steps that could undermine coal

output and limit market competition.

It also seeks civil fines for violating federal

antitrust and Texas consumer protection laws.

The case is Texas et al v BlackRock Inc ( BLK ) et al, U.S.

District Court, Eastern District of Texas, No. 24-00437.