Nebraska AG Secures Settlement with Vanguard on ESG Practices

AG: Nebraska News

Filed February 26th, 2026

Detected March 18th, 2026

Summary

Nebraska Attorney General Mike Hilgers, as part of a 13-state coalition, has secured a settlement with The Vanguard Group, Inc. Vanguard has agreed to make strong passivity commitments and empower investors with proxy voting, a first for the industry. The settlement includes a $29.5 million payment to the plaintiff states.

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What changed

Nebraska Attorney General Mike Hilgers announced a significant settlement with The Vanguard Group, Inc., as part of a 13-state coalition. This agreement resolves a portion of the multistate lawsuit against asset managers concerning alleged ESG-driven market manipulation. Vanguard has committed to the strongest passivity commitments in the industry and will empower investors with proxy voting rights, a novel development. The settlement also requires Vanguard to pay $29.5 million to the plaintiff states and prohibits it from using its shareholdings to direct portfolio companies' business strategies, threaten them, or nominate directors/proposals based on ESG goals. This action aims to ensure a competitive coal industry and fundamentally resets the precedent for institutional investor conduct.

This settlement has direct implications for fund managers and investors. Vanguard must ensure that at least 50% of assets in U.S. equity funds it advises are offered proxy voting rights, allowing investors to prioritize profitability over ESG goals. Regulated entities, particularly those in the financial services sector involved with institutional investing and ESG considerations, should review Vanguard's commitments and the implications for their own practices. While no specific compliance deadline is mentioned for other entities, the settlement's effective date is February 26, 2026, and it represents a new standard for institutional investor conduct that may influence future regulatory actions and market practices.

What to do next

Review Vanguard's settlement terms regarding passivity commitments and proxy voting.
Assess current investment strategies and proxy voting policies for alignment with new industry precedents.
Monitor ongoing litigation and potential future regulatory actions concerning ESG practices by institutional investors.

Penalties

$29.5 million paid to the Plaintiff States

Source document (simplified)

Posted Thursday, February 26, 2026 LINCOLN – Attorney General Mike Hilgers was part of a 13-State coalition that secured a monumental, first-of-its-kind settlement with The Vanguard Group, Inc. (“Vanguard”), resolving part of the multistate lawsuit against asset managers BlackRock, State Street, and Vanguard. As part of the settlement, Vanguard has agreed to make the strongest passivity commitments in the industry and to empower its investors with proxy voting—a first for the industry. This landmark settlement represents one of the most significant enforcement actions ever taken against coordinated ESG-driven market manipulation, ensures a competitive and low-cost coal industry, and fundamentally resets the precedent for the conduct of large institutional investors.

The lawsuit seeks to lower the cost of coal—and, thereby, electricity prices—throughout the United States by combatting a BlackRock–led cartel that sought to drive up the price of coal under the guise of “green energy.” BlackRock’s efforts produced massive profits for itself and its co-conspirators and raised the prices of electricity for consumers throughout the United States. To further profit on the back of Americans, BlackRock also deceived thousands of its investors who elected to invest in non-ESG funds. The Trump Administration’s Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) have taken legal action to support the lawsuit by filing a joint statement of interest.

“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.”

Under the settlement, Vanguard has committed to avoid imposing ESG goals over its customers’ profitability. For example, Vanguard will not use its shareholdings to (a) direct its portfolio companies’ business strategies, (b) threaten its portfolio companies that it will withdraw from its holdings unless they agree to act (or not act) in some manner, or (c) nominate directors or shareholder proposals to its portfolio companies. Vanguard has also agreed to pay a total of $29.5 million to the Plaintiff States.

In addition, Vanguard will offer proxy voting to investors in funds accounting for at least 50 percent of assets invested in U.S. equity funds it advises. This will ensure that Vanguard’s customers can make their voices known on portfolio companies’ business, including whether companies should maximize profitability over ESG or other goals.

Joining Nebraska in the Texas-led lawsuit were attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Oklahoma, West Virginia, and Wyoming.

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