Tennessee AG Skrmetti sues BlackRock over 'inconsistent' ESG statements

Tennessee Republican Attorney General Jonathan Skrmetti on Monday announced a lawsuit against asset manager BlackRock over its allegedly "inconsistent" statements on its environmental, social, and corporate governance (ESG) practices.

Central to the suit is the practice of ESG investing, a process by which asset managers assign greater weight to potential investments that may advance stated goals related to that initiative rather than solely weighing the prospect of returns. Critics have insisted that the practice represents a breach of a firm's fiduciary duties to its investors.

Skrmetti's suit takes aim at the asset manager's alleged efforts to minimize the weight it assigns to ESG considerations in its activities, which the AG insists have been "misleading" to investors.

"We allege that BlackRock’s inconsistent statements about its investment strategies deprived consumers of the ability to make an informed choice," Skrmetti said in a press release. "Some public statements show a company that focuses exclusively on return on investment, others show a company that gives special consideration to environmental factors. Ultimately, I want to make certain that corporations, no matter their size, treat Tennessee consumers fairly and honestly."

BlackRock has denied the allegations, telling Reuters that "BlackRock fully and accurately discloses our investment practices and our approach to proxy voting."

The practice of ESG investing is not limited to just BlackRock, however, and has become a mainstay of the financial sector, with a number of pro-ESG conglomerations convincing major firms to sign on to myriad climate and environmental goals.

Skrmetti in September, for instance, joined a group of Republican attorneys general in warning members of the Net Zero Financial Service Providers Alliance (NZFSPA) that their practices could potentially violate antitrust and consumer protection laws.

Although many NZFSPA signatories are direct competitors with each other, they nevertheless commit to using their market influence to enforce their collective climate agenda in the broader economy and to '[w]ork in coordination' with other UN-convened 'Net Zero' groups," the group wrote at the time. "Further, these pressure tactics are backed up by substantial market power."

Ben Whedon is an editor and reporter for Just the News. Follow him on X, formerly Twitter.