A stockholder in BlackRock, Inc. (BlackRock) filed a stockholder derivative complaint in the federal district court for the Eastern District of Texas alleging that BlackRock directors breached their fiduciary duties by pursuing environmental goals rather than acting solely in stockholders’ financial interests. The complaint alleged that the directors authorized coordinated conduct with other institutional investors to use their ownership stakes in coal producers to suppress coal output and that these actions had exposed the company “to massive antirust liability and financial exposure,” including in an <a href="https://www.climatecasechart.com/collections/texas-v-blackrock-inc-_c94f1f">antitrust action</a> brought by Texas and 12 other states. The complaint also alleged that the directors deceived investors about the company’s ESG (environmental, social, and governance) practices and that the defendants failed to disclose that they were “motivated by nonfinancial, ideological goals that caused foreseeable financial and reputational harm” to BlackRock, including the divestment by state pension funds. In addition to asserting that the directors breached their fiduciary duties, the complaint also asserted that the directors violated Section 14(a) of the Securities Exchange Act of 1934 by failing to make disclosures in 2025 proxy materials regarding the BlackRock board’s allegedly inadequate risk oversight and regarding the alleged “conspiracy to unlawfully restrain trade and coerce a reduction in coal output,” including failure to disclose that BlackRock was a defendant in the states’ antitrust lawsuit. The complaint also asserted that the directors were unjustly enriched by their unlawful conduct. The complaint requested that damages be awarded to BlackRock and that the court direct BlackRock and the defendants take steps to improve corporate governance and internal procedures, award BlackRock restitution, and award the plaintiff attorney and expert fees and other costs. 

Stockholder derivative action alleging that BlackRock, Inc. directors breached their fiduciary duties by pursuing environmental goals rather than acting solely in stockholders’ financial interests. 

Crognale v. Fink

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Stockholder Derivative Action Charged that BlackRock Directors Pursued Environmental Goals at Expense of Investors’ Interests

Filed

United States of America

Texas

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

woman and genders outside of the gender binary

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Stockholder Derivative Action Charged that BlackRock Directors Pursued Environmental Goals at Expense of Investors’ Interests

Target

Impacted group

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance