Tennessee Attorney General Jonathan Skrmetti told The Tennessee Star’s CEO and Editor-in-Chief Michael Patrick Leahy that ESG (Environment, Social, and Governance) investing is “dead” at the “biggest asset manager in the world” on Friday as a result of a settlement reached Friday between the State of Tennessee and BlackRock, Inc.
In December 2023, Skrmetti filed a consumer protection lawsuit against BlackRock’s ESG investing, arguing that the hedge fund had misled consumers in Tennessee about the scale and impacts of its ESG initiatives for several years.
On Friday, in a nine-page settlement, BlackRock agreed to disclose which of its funds are explicitly focused on ESG, remove ESG ratings and sustainability data from certain funds, conduct independent audits regarding its ESG initiatives, disclose its membership in climate change organizations, among other concessions to Tennessee.
Skrmetti, in an exclusive interview on The Michael Patrick Leahy Show, said Friday’s settlement ensures that BlackRock will no longer be “allowed to prioritize anything over return on investment unless their customer allows them to do it and authorizes it.”
“This is a hard pivot for BlackRock. It basically means ESG is dead at the biggest asset manager in the world,” Skrmetti said.
“If somebody wants to invest in an environmental fund that makes less money but advances their causes, they’re allowed to do that, but you have to be able to knowingly choose it. It shouldn’t be secretly done with your money when you’re not paying attention,” Skrmetti added.
Skrmetti said he believes Friday’s settlement will set a precedent for ESG investing for other asset managers and financial companies moving forward, given BlackRock’s influence.
“The settlement…is going to stop a lot of the ESG shenanigans that we’ve seen since BlackRock was the main culprit for that,” Skrmetti said.
“I sincerely hope that this really does solve the problem. They’ll set an example for other asset managers and other financial companies. The fact that they were willing to make such significant changes and expose themselves to such significant oversight by the state, there will be auditing going on for years, should send a signal to everybody that this is not okay and that companies that are trusted with investors money need to invest it in ways that maximize return,” Skrmetti added.
Watch the full interview:
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network. Follow Kaitlin on X / Twitter.
Photo “Jonathan Skrmetti” by Tennessee Attorney General.
