
Tennessee Attorney General Jonathan Skrmetti has reached a settlement with BlackRock, Inc., ending a lawsuit over the company's use of Environmental, Social, and Governance factors in its investments. The state accused BlackRock of violating the Tennessee Consumer Protection Act by not clearly disclosing how Environmental, Social, and Governance factors were integrated into its strategies and overstating the financial benefits of these approaches, according to the Attorney General's Office.
"This resolution assures that the money Tennesseans invest with BlackRock is managed consistent with the funds’ disclosures," Skrmetti said. The settlement focuses on ensuring investors are aware of Environmental, Social, and Governance-driven investment choices and that these choices are clearly disclosed, as stated by the Attorney General's Office.
BlackRock has agreed to increase transparency by providing more details on its proxy voting practices and will be audited by an external party to ensure compliance. It will also ensure its communications with investors reflect its fiduciary duties, and for funds focused on financial returns, votes will be cast based solely on financial interests. The lawsuit is dismissed without prejudice but can be reinstated if BlackRock fails to adhere to the terms of the agreement, as reported by the Attorney General's Office.