Tennessee Attorney General Jonathan Skrmetti has announced a significant settlement with BlackRock, Inc., concerning allegations related to the firm’s Environmental, Social, and Governance (ESG) investment practices. The settlement addresses claims that BlackRock did not fully disclose its use of ESG criteria in asset management decisions and possibly overstated the financial advantages of ESG strategies. These actions were alleged to have potentially misled investors regarding the firm’s investment goals and alignment with climate and policy-related objectives.
Attorney General Skrmetti emphasized the importance of transparency, stating that the settlement ensures investors in Tennessee have their funds managed in line with the disclosed objectives. The agreement allows investors to make informed decisions about directing their assets towards specific goals beyond financial returns.
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Key components of the settlement include BlackRock enhancing its transparency in proxy voting practices, implementing compliance measures with regular audits by third-party services, ensuring investor communications are clear and consistent, and committing to prioritize financial interests in funds without broader investment objectives.
The State of Tennessee will dismiss its lawsuit against BlackRock without prejudice, retaining the option to refile if the company does not adhere to the settlement terms. The full details of the settlement can be accessed here.
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