Tennessee Attorney General Jonathan Skrmetti announced a settlement with BlackRock on Friday, resolving allegations that the asset manager misled customers regarding the role of ESG factors in its investment practices.

Tennessee said it settled a lawsuit with BlackRock Inc. after accusing the world’s largest money manager of allegedly breaching consumer protection laws by making “misleading” statements about its ESG investment strategy.

BlackRock has invested more than $41.7 billion in Tennessee companies and is the world’s largest asset manager.

Tennessee AG Skrmetti settles with BlackRock over ESG disclosures, ensuring transparency and fidelity to investors' interests.

The settlement ends a lawsuit that was originally filed in December 2023 by the state of Tennessee under the Tennessee Consumer Protection Act. The suit alleged that BlackRock overstated the financial benefits of ESG-related strategies and didn’t adequately disclose its integration of ESG factors.

BlackRock and the state of Tennessee on Friday reached a settlement over a lawsuit claiming the asset management firm downplayed how large a role environmental, social and governance proposals made in its investment process.