BlackRock on Monday was sued by the US state of Tennessee, which accused the $9.1tn New York-based asset manager of violating consumer protection laws by misusing environmental, social and governance factors in its investment strategy.
The lawsuit filed in state court by Tennessee attorney-general Jonathan Skrmetti alleged that BlackRock had been inconsistent in stating whether it focused exclusively on investment returns or whether it gave preference to ESG considerations.
“For years . . . BlackRock has misled consumers about the scope and effects of its widespread ESG activity,” the complaint said. The lawsuit goes on to claim that “BlackRock has downplayed the extent to which ESG considerations drive its investment strategies across all holdings, even in non-ESG funds” and “overstated the extent to which ESG considerations can affect companies’ financial performance and outlook”.