For the first time, and in what may prove to be a precedent-setting case, a global asset manager is being sued for allegedly leveraging investors’ money to pursue political goals.
Tennessee’s Attorney General, Jonathan Skrmetti filed a lawsuit on Monday against BlackRock, the world’s largest fund manager with approximately $9 trillion in assets under management, charging that the firm “has been on the forefront of using aggressive strategies to push controversial environmental, social, and governance (ESG) goals across the assets it manages.”
“BlackRock has admitted that promoting ESG aims—like companies’ radically reducing their carbon output—can conflict with its funds’ financial performance,” the lawsuit states. “It is thus only fair that consumers know if the hard-earned funds they invest will be leveraged to BlackRock’s ESG ends, rather than to maximizing financial returns.” In response to the suit, BlackRock stated: “We reject the attorney general’s claims and will vigorously contest any accusations that BlackRock violated Tennessee’s consumer protection laws.”