The Tennessee Attorney General filed a civil enforcement complaint against BlackRock, Inc. in December 2023 alleging that the investment management firm had “been at the forefront of using aggressive strategies to push controversial Environmental, Social, and Governance [(ESG)] goals across the assets it manages,” including goals to reduce portfolio companies’ carbon emissions. The complaint alleged that BlackRock misled consumers about the scope of its ESG activity in violation of the Tennessee Consumer Protection Act. The Attorney General contended that the “shifting public and political dynamics around ESG have left BlackRock in a bind”— needing to appeal to “a broad base of customers, many of whom do not want their funds or investment managers engaged in ESG-related activities,” while remaining a member of organizations that “demand sweeping ESG commitments.” The Attorney General charged that BlackRock had elected to deceive consumers about its commitment to ESG aims by “falsely convey[ing] that certain of its funds do not incorporate ESG considerations” and by “overstat[ing] the extent to which its ESG aims bear on companies’ financial positioning and performance,” including by representing that consideration of ESG factors creates financial benefits to investors. The Attorney General sought an injunction to bar BlackRock from engaging in TCPA violations; civil penalties; orders and judgment restoring to consumers money or property lost as a result of the violations; and orders and judgments necessary to “disgorge the net-profits and ill-gotten gains BlackRock realized.”

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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Tennessee Attorney General Said BlackRock Violated Tennessee Consumer Protection Act with Misleading Information About ESG

Filed

United States of America

Tennessee

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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.

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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.

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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

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

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A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

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.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

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.

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This sector involves the wholesale and retail selling of goods.

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Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

Tennessee Attorney General Said BlackRock Violated Tennessee Consumer Protection Act with Misleading Information About ESG

Target

Policy instrument

Risk

Fossil fuel

Greenhouse gas

Economic sector

Finance