In a groundbreaking move, the State of Tennessee has filed a lawsuit against BlackRock, the world’s largest financial asset manager. The lawsuit, obtained exclusively by FOX Business, accuses BlackRock of harming consumers through its inconsistent environmental commitments and climate strategy. This legal challenge marks the first of its kind against the influential firm.
According to the lawsuit, BlackRock has articulated two contradictory positions: one prioritizing financial returns and the other prioritizing investment policies to combat climate change. Tennessee Attorney General Jonathan Skrmetti argues that these inconsistent statements deprived consumers of the ability to make an informed choice. He emphasizes the importance of corporations treating Tennessee consumers fairly and honestly, regardless of their size.
The lawsuit highlights the opposition BlackRock has faced over its environmental, social, and governance (ESG) strategy. Republican state attorneys general and financial officers have criticized the firm for allegedly using its financial power to force companies into adopting certain policies. Critics argue that ESG-focused asset managers like BlackRock are neglecting their fiduciary duty and potentially sacrificing financial performance by promoting climate policies that conflict with the profitability of the fossil fuel industry.
The legal action stems from BlackRock’s alleged misleading of consumers regarding the scope and effects of its ESG activity. The lawsuit claims that BlackRock’s conduct in marketing and selling its investment products and services constitutes deceptive acts and practices under the Tennessee Consumer Protection Act.
The lawsuit also points out that in recent years, BlackRock has joined activist organizations such as the Net Zero Asset Managers initiative and Climate Action 100+. These initiatives require members to make climate commitments, aiming to mitigate financial risk and maximize long-term asset value. BlackRock’s CEO, Larry Fink, has publicly stated that the firm asks companies it holds investments in to set greenhouse-gas-reduction targets, which it monitors through voting and engagement.
However, Fink attempted to backtrack on his ESG commitments earlier this year after several states threatened to withdraw billions of dollars in state pensions managed by BlackRock. The executive director of Consumers’ Research, a right-leaning consumer advocacy group, commends Attorney General Skrmetti’s efforts to protect consumers and expose deception from asset management firms like BlackRock. He claims BlackRock and Fink have been forsaking their fiduciary duty by using consumers’ money for leftist causes, such as ESG and arbitrary net-zero goals.
BlackRock has not yet responded to the lawsuit, and FOX Business has reached out for comment.
In conclusion, Tennessee’s lawsuit against BlackRock sheds light on the concerns surrounding the firm’s alleged consumer harm through its inconsistent climate strategy. As the world’s largest financial asset manager, BlackRock’s actions and statements regarding ESG policies have drawn significant attention and criticism. This legal challenge represents a significant step in holding corporations accountable for their environmental commitments and ensuring transparency for consumers.
