Tennessee, BlackRock settle lawsuit on ESG disclosures

Tennessee Attorney General Jonathan Skrmetti announced a settlement with BlackRock, Inc. over allegations that the investment firm misled consumers regarding the role of environmental, social, and governance (ESG) factors in its investment practices. The lawsuit, filed in December 2023, claimed that BlackRock failed to adequately disclose the extent of ESG considerations in its strategies, potentially misleading investors about their financial implications. Under the settlement, BlackRock will enhance transparency, undergo regular audits, and ensure compliance with state requirements, though no fines or admission of wrongdoing were part of the agreement. Skrmetti emphasized that the settlement protects investors by ensuring their money is managed according to proper disclosures. This case reflects a broader trend among red states challenging firms with ESG commitments. The outcome may signal implications for other similar legal actions against investment practices related to ESG.