States go after ‘woke’ investment behemoth Vanguard, try to derail massive purchase of utilities

More than a dozen Republican-led states want federal energy regulators to put the kibosh on plans by asset manager Vanguard Group to purchase more than $10 million in shares of public utility companies because the firm supports “woke” investment strategies known as ESG.

Attorneys general from 13 states filed a motion to the Federal Energy Regulatory Commission requesting it block Vanguard’s purchase. They argued that the investment corporation’s ESG rules prioritize combating climate change and could adversely impact household power bills that rely on fossil fuels.

ESG is an acronym for environmental, social and governance. Companies with ESG policies use those factors to guide investments.

The attorneys general argued that greenlighting the massive utility purchase by Vanguard, one of the world’s largest investment firms with roughly $7 trillion in global assets under management, would be “contrary to the public interest.”

“Vanguard’s environmental mandates impose costs on its portfolio companies, and it is highly plausible that those costs are passed on to consumers directly or indirectly by hampering access to capital or foreclosing certain revenue-generating opportunities,” wrote the Republican attorneys general. “A holding company of Vanguard’s size and influence should not be overlooked; to do so would be an abdication of the Commission’s statutory duty to safeguard the energy markets.”

FERC must approve or deny such large stakes in public energy companies and previously allowed a similarly large purchase from Vanguard in 2019.

The attorneys general cited PacifiCorp, a public utility company in Utah, as an example of why Vanguard’s ESG policies warrant blocking the purchase. It is owned by Berkshire Hathaway Energy, a company that Vanguard invests in and has advocated for it to make public climate-related disclosures.  

Because of Vanguard’s ESG investing and its push to combat climate change, consumers in Utah “would be harmed if their costs went up because of closure of these facilities or substitution of more expensive energy sources,” the attorneys general said.

Vanguard said it welcomed a regulatory review.

“As an investor-owned asset manager, Vanguard’s role is to promote long-term value creation for investors in our funds, leaving management and policy decisions to companies and policymakers. We look forward to working through the regulatory process,” Vanguard said in a statement to The Washington Times.

The push for RERC action was led by Utah Attorney General Sean Reyes. Other states that signed onto the motion include: Indiana, Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Ohio, South Carolina, South Dakota and Texas. Investor-owned utilities are present in all of these states.

The states also accused Vanguard of “engaging in environmental activism and using its financial influence to manipulate the activities of the utility companies in its portfolio.”

Republican-led states mounted a campaign against ESG, which critics say is corporate “woke” activism. They have collectively divested more than $1 billion in pension plans and other state funds from pro-ESG corporations.