Tennessee Attorney General Sues BlackRock: ‘Inconsistent Statements’

Tennessee Attorney General Jonathan Skrmetti has filed a lawsuit against asset manager company BlackRock.

“We allege that BlackRock’s inconsistent statements about its investment strategies deprived consumers of the ability to make an informed choice,” Attorney General Jonathan Skrmetti told Fox Business. “Some public statements show a company that focuses exclusively on return on investment, others show a company that gives special consideration to environmental factors. Ultimately, I want to make certain that corporations, no matter their size, treat Tennessee consumers fairly and honestly.”

The lawsuit is a response to the company’s “conflicting statements and assertions regarding ESG’s influence over BlackRock’s business decisions,” according to a press release.

“As one of the world’s largest investment-management firms, defendant BlackRock, Inc. has been at the forefront of using aggressive strategies to push controversial Environmental, Social, and Governance (‘ESG’) goals across the assets it manages,” the lawsuit says. “BlackRock marketed many of its funds as devoid of ESG considerations and has admitted that ESG aims-in particular, radically reducing portfolio companies’ carbon output-‘do not provide an indication of current or future performance nor do they represent the potential risk and reward profile of a fund.'”

“For years, however, BlackRock has misled consumers about the scope and effects of its widespread ESG activity,” the filing asserts.

The lawsuit explains that BlackRock does not provide adequate information to its consumers.

“BlackRock remains a member of organizations like CAl00+ or NZAM, which demand sweeping ESG commitments. Other similar companies-like Vanguard-have withdrawn from these groups to provide “clarity” to investors regarding their position on climate-change risks,” according to the filing. “BlackRock’s continued membership requires BlackRock’s ongoing commitment to pushing aggressive carbon-reduction strategies across all assets under management. Pulling back from its previous promises to ESG groups risks drawing unwanted negative attention and loss of business from the powerful investors, media members, and politicians who have demanded that firms prioritize ESG considerations.”

“Rather than risk either downside, BlackRock has chosen a third way: deceiving consumers about the company’s extensive commitment to fulfilling ESG aims.”

As of December 2022, several states in the US, including Arkansas ($125 million), Florida ($2 billion), Louisiana ($794 million), Missouri ($500 million), South Carolina ($200 million), Utah ($100 million), and West Virginia ($8 billion), have divested a total of approximately $11.7 billion from BlackRock due to ESG concerns.

These divestments represent a small portion, approximately 0.15%, of the $8 trillion managed by BlackRock.