The Tennessee Attorney General agreed to dismiss his action against BlackRock, Inc. alleging violations of the Tennessee Consumer Protection Act related to BlackRock’s disclosures regarding environmental, social, and governance (ESG) factors in its management of investments. The dismissal is contingent on BlackRock’s substantial compliance with undertakings set forth in a settlement agreement. The undertakings included a requirement that BlackRock engage with portfolio companies and cast shareholder votes “solely to further the financial interests of investors” in “In-Scope Funds,” which are funds that do not disclose investment objectives beyond financial performance (such as sustainability) or screens or investment restrictions based on non-financial criteria. BlackRock also agreed to cast proxy votes based on its “own independent judgment and without coordinating or communicating its voting plans” with external entities and to maintain records regarding its reasons for declining to vote with management recommendations on environmental or social shareholder proposals. Other requirements included removing data regarding “sustainability characteristics” from the U.S. product pages for In-Scope Funds and disclosing on its website any memberships in organizations “principally devoted to achieving climate-focused investment or stewardship objectives and having written terms of membership.” A third-party service is to conduct annual audits of BlackRock’s compliance with recordkeeping obligations. BlackRock must establish procedures and training “reasonably designed to achieve compliance” with the settlement’s requirements. 

Tennessee Attorney General's civil enforcement against BlackRock, Inc. alleging violations of the Tennessee Consumer Protection Act in connection with alleged ESG investment strategies.

State ex rel. Skrmetti v. Blackrock, Inc.

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BlackRock and Tennessee Attorney General Settled ESG-Related Consumer Protection Claims

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United States of America

Tennessee

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BlackRock and Tennessee Attorney General Settled ESG-Related Consumer Protection Claims

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