Tennessee Attorney General Jonathan Skrmetti said his consumer protection lawsuit against BlackRock’s Environmental, Social and Corporate Governance (ESG) investing will force the company to disclose if it is mixing ESG factors when making investment decisions instead of focusing on financial factors relative to the rate of return.
Skrmetti filed his lawsuit against BlackRock in December 2023, alleging that the hedge fund has misled consumers in Tennessee about the scale and impacts of its ESG initiatives for several years.
During Monday’s edition of The Tennessee Star Report with Michael Patrick Leahy, Skrmetti described the case as a “very simple consumer protection case,” however, noted that the argument surrounding ESG is the first of its kind.
“The case against BlackRock is a simple consumer protection case, arguing that they both said that they were going to maximize return on investment and they said that they were going to use every asset under their management, they have about nine trillion dollars under management, to advance environmental causes. You can’t do both,” Skrmetti said.
“You’re either looking at nothing but return on investment or you’re mixing that with some other preference and consumers need to know which philosophy will manage their assets,” Skrmetti added. “This is the first lawsuit, I think, that’s come in based on this theory.”
Skrmetti noted that despite the lawsuit being filed more than two months ago, the case is “still in a very initial phase,” as his office has yet to hear back from BlackRock.
“We’re waiting on a response from BlackRock and that will come sometime in the relatively near future, I’m sure, but you know, the battle has not really been joined yet,” Skrmetti said. “They’re going to have very expensive attorneys making very nuanced arguments and it’s going to be a fight.”
Regarding ESG investing as a whole, Skrmetti said he believes the concept was born from individuals who “got together at Davos and decided that they were going to save the world” without thinking the concept through.
“I’m looking at this and I see a lot of statements coming out of a variety of participants in this area where, you know, my read is they overreached, that people got together at Davos and decided they were going to save the world and they didn’t really think about how, and now people are having serious second thoughts,” Skrmetti said.
Closing out the segment, Skrmetti recounted his work so far as attorney general, noting how the job has been “way busier” than he anticipated as the Biden administration continues to circumvent Congress and the Constitution.
“It’s been way busier than I anticipated. AGs are just in the middle of things in a way that we institutionally haven’t been for a long time,” Skrmetti explained. “It’s been ramping up since the Bush administration, since the Obama administration, especially, then the Trump administration when the democratic AGs were very active. Right now, we have a federal administrative state that is trying to circumvent Congress and the constitution a lot and so there are many places we have to push back. We’re doing our part in Tennessee, but it’s a full team effort. You see AGs across the country involved in this.”
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.
Fantastic interview! Jonathan Skrmetti is the best AG across the country. We are very blessed and thankful to have him as our Attorney General.