micro-dose of anarchy [week 3]
The one where bribery is 'totally normal', passive funds get their ESG divorce papers, and a single good thing happened for the Labour government.
I’m a couple of weeks behind, but I’ve been waylaid with an unexpectedly emotional attachment to the Olympics (and other stuff). We’re back to regularly scheduled programming. I’ve got a hot take on green finance baking for Monday, but in the meantime - my nerdy gossip.
full anarchy: blind item of the week
SPOTTED: A certain Midwestern power utility is currently watching its former CEO argue, in open court, that paying $4.3 million to a lawyer shortly before he was appointed to regulate the company was just standard industry practice.
The lawyer in question, now dead, found the arrangement equally unremarkable. He did not survive to offer his own testimony, which is proving moderately inconvenient for the defence.
Of course, this company also believed that funnelling $60 million through dark money groups to an organisation controlled by the sitting House Speaker in exchange for a law bailing out two nuclear plants and two 1950s-era coal plants that couldn’t compete on the open market is also standard practice.
The result: ratepayers have paid approximately half a billion dollars since 2020 to subsidise plants the market had already sentenced to death.
The company settled with the Department of Justice for $230 million.
The Speaker is in prison.
The former CEO is now asking jurors to believe he had no idea any of this was unusual.
Formal request for Ryan Murphy to immortalise this in the style of American Crime Story meets All’s Fair.
ESG’s Terrible, Horrible, No Good, Very Bad Day
Vanguard has agreed to pay $29.5 million and gut most of its ESG-related shareholder activism to settle an antitrust lawsuit brought by 13 Republican state attorneys general.
Some background: Vanguard, BlackRock, and State Street collectively manage tens of trillions of dollars in passive funds: index funds that, by design, must hold whatever stocks are in the index. They can’t sell. But they can vote.
The core allegation: The Republican AGs argued these three firms were using their outsized voting power, which was built on money from ordinary investors who just wanted to track the S&P 500, to coordinate a climate agenda: restrict capital to fossil fuels, pressure coal companies into cutting production, etc.
The AGs argued that coordination, on behalf of investors who never asked for it, amounted to market manipulation.
Vanguard settled. BlackRock and State Street haven’t yet.
The settlement terms are worth sitting with. Vanguard can no longer use its shareholdings to direct portfolio companies’ business strategies, nominate directors, or file shareholder proposals on ESG grounds.
It must also extend proxy voting rights to investors in funds covering 50% of its US equity assets, meaning investors get to decide how their shares vote, rather than Vanguard deciding on their behalf.
I didn’t have Ken Paxton as a champion of market integrity on my 2026 bingo card. But let’s be honest: ESG as practised by the largest passive fund managers was mostly not working anyway. It was a way for large institutions to perform climate values without actually committing to them.
The settlement didn’t kill something that was working. It killed a wrapper that was already splitting at the seams, and replaced a vague, implicit climate commitment with — well, we’ll find out.
🏆 Winners
Ken Paxton and the Republican AG coalition. They found a genuinely interesting legal weapon (antitrust law) and used it effectively. Even if you hate the players, respect the game.
Passive investors who want passive management. Vanguard was supposed to track indices. The settlement returns it to roughly doing that.
The “honest capital” camp. Investing under explicit mandates rather than being laundered through mainstream passive funds is a cleaner system. Explicit is better than implied (even if it’s harder to sell).
💔 Losers
The idea that ESG was ever a coherent investment thesis. It wasn’t. The settlement didn’t kill something that was working.
BlackRock and State Street. Vanguard just handed the AGs a $29.5 million precedent. The litigation against the other two continues.
Anyone who used ESG ratings to attract capital and meant it. The settlement further erodes the credibility of ESG as a category, which closes a financing channel that some genuinely useful projects were using.
💥 Anarchy Opportunists
Dedicated green funds with honest mandates. The money implicitly “ESG-aligned” inside passive funds has to go somewhere. Funds that say explicitly “we invest in the energy transition” and mean it are now better positioned than funds that were vaguely gesturing at it.
Retail investors. Proxy voting rights being extended at scale is a structural change buried in this settlement. Probably not what Paxton intended.
🧾 UK energy bills down £117 — let’s look at the receipts
There were some *cough* other things happening in the UK this week, but amidst the chaos, Keir Starmer announced that energy bills are coming down by £117 from 1 April.
The Ofgem price cap drops from £1,758 to £1,641. The Prime Minister says this is “because of the actions this Government took at the last budget.”
Sure, Jan. Let’s look at what actually happened.
The government removed the Energy Company Obligation (ECO) scheme from bills, saving households roughly £150. ECO was the latest iteration of a programme meant to fund insulation and heating upgrades for low-income households. It was also, by any honest reckoning, a disaster: a 98% non-compliance rate for external wall insulation, a trail of botched retrofits. And this is only the latest interaction of failed attempts. ECO deserved to be cancelled.
But the government is taking credit for removing a failing programme — and using the resulting bill reduction as evidence of policy success — while simultaneously promising to spend billions on the Warm Homes Plan, its replacement, which has not yet delivered a single retrofit and is still very fuzzy on delivery.
We are booking a win today against a commitment to spend considerably more tomorrow, in exchange for outcomes that ECO, by the way, was also supposed to deliver.
This is not a policy triumph.
Network costs went up by £66 — because the grid genuinely needs upgrading and that cost has to live somewhere. Correct and honest. Fine.
Wholesale gas prices fell by £38. The government did not cause this.
Bills remain 40% above historic levels. The long game here is the Warm Homes Plan actually working, which requires it to avoid ECO’s fate: mass deployment of a complex technical intervention through a fragmented supply chain, overseen by a new agency, at speed.
The UK has a well-documented track record on this type of execution challenge. It is not a reassuring one.
Scores, please.
💚 Social Outcomes: 🟡 Meh, 5/10
£117 is real money. Bills are still 40% above historic levels. Fuel poverty is structural, not solved.
🕹️ Technology Outcome. ⚪️
Not applicable.
💷 Economic Outcome: 🔴 No points to Gryffindor.
Removing a failing cross-subsidy and calling it a win, while committing to spend more on its replacement, is circular accounting. The Warm Homes Plan will cost significantly more than ECO.
Wholesale prices did fall…primarily due to the weather.
🛡️ Security Outcome: 🔴
Bills are still driven by wholesale gas. Nothing here changes that structural exposure.
🌲 Environmental Outcome: 🟡No winning yet.
ECO deserved to go. But removing it before the Warm Homes Plan is operational creates a real gap.
🏃Temporal Outcome: 🟡We’re playing high stakes.
Everything now depends on Warm Homes Plan delivery. History suggests some humility is warranted.
🇬🇧Political Outcome: 🟢
I’ll give them the win, just because it was the only bright spot in what was otherwise a terrible week for the Labour Government. Clean headline. Effective framing.
Anarchist verdict: A modest, real bill reduction — funded partly by cancelling a programme that failed by the government’s own metrics, and partly by a gas price movement nobody in Downing Street engineered. The ECO removal was the right call. The victory lap is not.
📚 anarchist read of the week
Aaron Foyer is a former colleague and I genuinely love talking energy and politics with him. He’s now the Director of Research at Orennia. This week, he traces what the Trump administration’s cheerleading for a weaker dollar means for energy.
A weak dollar is, as he puts it, just another tariff — hitting the cheapest, fastest-to-scale sources of new power at precisely the moment the AI buildout is screaming for them. The closing line is the whole argument in nine words: “When artificial price anchors break, reality sends the invoice.” Delish.
