The Tennessee-BlackRock Settlement: A Win for Transparency and Investor Interests
6 hours ago Charles Rotter
In a high-stakes showdown that captured the attention of investors nationwide, the State of Tennessee has reached a settlement with BlackRock, Inc. regarding its use of Environmental, Social, and Governance (ESG) factors in the management of U.S. mutual funds. While skeptics might dismiss the agreement as symbolic, a closer inspection reveals an important victory for investor rights, transparency, and accountability in the financial sector.
The Allegations and Context
At the heart of this case was the assertion that BlackRock had violated Tennessee’s Trade Practices Act (TCPA) by failing to adequately disclose the role of ESG factors in its decision-making processes. ESG investing has been a polarizing topic, with proponents hailing it as a forward-thinking approach to sustainable finance and critics decrying it as a distraction from fiduciary duties. The lawsuit filed by Tennessee Attorney General Jonathan Skrmetti aimed to address these tensions, arguing that investors deserved clarity and honesty about the criteria shaping their portfolios.
What the Settlement Requires
Enhanced Transparency in Proxy Voting: BlackRock has committed to casting proxy votes for “In-Scope Funds” independently, without influence from external organizations, and will disclose the rationale behind its votes on a quarterly basis. This is a significant step forward in demystifying how fund managers make decisions that directly impact shareholders’ returns.
https://wattsupwiththat.com/2025/01/17/the-tennessee-blackrock-settlement-a-win-for-transparency-and-investor-interests/
