Tennessee Attorney General Jonathan Skrmetti has filed an unprecedented lawsuit against BlackRock, alleging that the asset management company has misled customers about its investment priorities.
According to the consumer protection case filed in state court on Monday, BlackRock has deliberately downplayed the extent of its environmental, social, and governance (ESG) policies, depriving investors of the ability to properly assess the company’s objectives.
“We allege that BlackRock’s inconsistent statements about its investment strategies deprived consumers of the ability to make an informed choice,” said a statement from Skrmetti’s office. “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.”
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Environmental, Social, and Governance policies stem from a widespread investment strategy that accounts for a company’s support for environmental causes, involvement in social justice issues, and compliance with governmental ordinances. The ESG agenda has been spearheaded by investment firms and asset management groups — and BlackRock, the largest money manager in the world, has been its biggest proponent.
In recent years, these policies have become the driving force for left-wing agendas in corporate culture, responsible for racial bias training, carbon emission caps, and diversity, equity, and inclusion audits.
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In recent years, Republican lawmakers have extensively criticized the leverage BlackRock’s $9.1 trillion in managed assets has given the company over the corporate world. Multiple Red States have fully or partially divested themselves from the financial giant, citing ESG policies as their primary concern.
Earlier this year, Skrmetti added his name to a list of 20 other attorneys general warning asset managers like BlackRock against violating their legal fiduciary responsibilities by getting involved in politics. Promoting environmental regulations, for example, would lead the company to avoid otherwise profitable investment opportunities in the fossil fuel industry.
The Tennessee lawsuit specifically calls attention to BlackRock’s investments in the climate-minded Net Zero Asset Managers Initiative and Climate Action 100+, both of which lobby for “net zero” policies around the world. These investments are at odds with statements from company CEO Larry Fink, who has insisted that “everything we do is on behalf of our clients, and everything we do is with the purpose of financial returns.”
“Tennessee consumers deserve to know which of BlackRock’s statements are a true account of the company’s decision-making,” Skrmetti said.
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