{"id":14784,"date":"2023-12-19T13:45:00","date_gmt":"2023-12-19T13:45:00","guid":{"rendered":"https:\/\/www.esgtoday.com\/?p=14784"},"modified":"2023-12-19T17:37:34","modified_gmt":"2023-12-19T17:37:34","slug":"blackrock-sued-by-tennessee-for-deceiving-consumers-about-esg-investing","status":"publish","type":"post","link":"https:\/\/www.esgtoday.com\/blackrock-sued-by-tennessee-for-deceiving-consumers-about-esg-investing\/","title":{"rendered":"BlackRock Sued by Tennessee for \u201cDeceiving Consumers\u201d about ESG Investing"},"content":{"rendered":"\n
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Tennessee Attorney General Jonathan Skrmetti announced the launch of a new lawsuit against investment giant BlackRock, alleging that the firm misrepresented the extent to which it uses ESG considerations in its investment strategies, including in those that do not have a stated sustainability focus.<\/p>\n\n\n\n

The complaint states that BlackRock is \u201cdeceiving consumers about the company’s extensive commitment to fulfilling ESG aims.\u201d<\/p>\n\n\n\n

The consumer protection lawsuit filed on Monday, focused on BlackRock\u2019s use of corporate engagement and proxy voting to achieve climate-related goals, alleges that the firm made conflicting statements regarding the impact of ESG on its decisions, by claiming to be focused solely on financial returns, while its participation in groups such as the Net Zero Asset Managers Initiative (NZAM) and Climate Action 100+ (CA100+) require BlackRock to promote carbon reduction strategies across its portfolios.<\/p>\n\n\n\n

In a statement following the launch of the lawsuit, a BlackRock spokesperson said that the firm would \u201cvigorously contest any accusations that BlackRock violated Tennessee’s consumer protection laws,\u201d adding that it \u201cfully and accurately discloses our investment practices and our approach to proxy voting.\u201d<\/p>\n\n\n\n

The suit specifies that \u201cBlackRock has falsely conveyed that certain of its funds do not incorporate ESG considerations,\u201d despite its participation in NZAM and CA100+, as well as the firm\u2019s record that \u201cshow that ESG considerations in fact drive portions of its investment strategy-including for non-ESG-funds,\u201d and that the firm \u201coverstated the extent to which its ESG aims bear on companies’ financial positioning and performance.\u201d<\/p>\n\n\n\n

In a statement announcing the launch of the lawsuit, Skrmetti said:<\/p>\n\n\n\n

\n

\u201cWe allege that BlackRock\u2019s inconsistent statements about its investment strategies deprived consumers of the ability to make an informed choice. 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.\u201d<\/p>\n<\/blockquote>\n\n\n\n

BlackRock, as the largest global investment management company, and a leading voice in the investment community on climate change and energy transition-related investment themes, has found itself at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of following a social agenda, or of \u201cboycotting\u201d and working to harm energy companies.<\/p>\n\n\n\n

The U.S. anti-ESG push has seen Florida pull $2 billion<\/a> in assets from BlackRock\u2019s management, placed on a list<\/a> of ESG-supporting asset managers subject to potential divestment by Texas, and subject to accusations<\/a> of \u201cboycotting\u201d energy companies by 19 state Attorneys General, including Tennessee.<\/p>\n\n\n\n

The firm even featured prominently in the recent Republican presidential debates<\/a>, with some candidates accusing BlackRock of pushing an ideological agenda on the U.S. and holding back energy companies from producing oil.<\/p>\n\n\n\n

Despite the political pressure, however, BlackRock signaled earlier this year in its release of its 2023 engagement priorities that its engagements with companies would continue to include sustainability-focused topics<\/a> such as \u201cClimate and natural capital,\u201d and \u201cCompany impacts on people,\u201d while also explaining that its engagement strategy is focused on understanding how companies manage risks and capitalize on opportunities, and that it \u201cdoes not tell companies what to do.\u201d Similarly, in its commentary section discussing its climate-focused engagements, BlackRock stated that \u201cit is not our role to engineer a specific decarbonization outcome in the real economy.\u201d<\/p>\n\n\n\n

In the statement from the BlackRock spokesperson, the firm added:<\/p>\n\n\n\n

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“On behalf of our clients, BlackRock has invested approximately $40 billion in Tennessee, and we are helping more than 600,000 hard-working Tennesseans retire with dignity. We are proud of our contribution and committed to the future in Tennessee.”<\/p>\n<\/blockquote><\/span>","protected":false},"excerpt":{"rendered":"

Tennessee Attorney General Jonathan Skrmetti announced the launch of a new lawsuit against investment giant BlackRock, alleging that the firm misrepresented the extent to which it uses ESG considerations in its investment strategies, including in those that do not have a stated sustainability focus. 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