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The next round of the ESG fight should start in Congress, not in court

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The Hill or enjoy below:

🗞️ Driving the news: In 2023, state legislative sessions saw approximately 165 bills related to environmental, social, and governance (ESG) investment criteria
• A notable shift involves taking ESG issues to court, exemplified by Tennessee Attorney General Jonathan Skrmetti's lawsuit against BlackRock for allegedly making false ESG claims to consumers

🔭 The context: The lawsuit focuses on BlackRock's purported misrepresentations about ESG considerations in their investment strategies, referencing its involvement with the Net Zero Asset Managers Initiatives and Climate Action 100+
• This legal action could, if successful, increase costs for investors, impacting particularly retired Tennesseans negatively

🌍 Why it matters for the planet: The case highlights a growing tension between advancing ESG goals and the potential adverse effects on investors
• It also underscores the complex interplay between asset managers' fiduciary duties, ESG considerations, and the broader implications for sustainable finance and climate action

⏭️ What's next: This legal approach reflects a broader trend of using litigation to influence policy on climate change and ESG issues, potentially setting a precedent for how consumer protection laws are leveraged in environmental advocacy
• However, it raises concerns about the efficacy and appropriateness of resolving policy debates in court rather than through legislative processes

💬 One quote: A "first-of-its-kind” consumer lawsuit against BlackRock (General Jonathan Skrmetti, Tennessee Attorney)

📈 One stat: Approximately 165 bills related to ESG investment criteria were introduced in state legislatures in 2023
• This highlights the growing legislative attention towards integrating ESG debates into financial and investment decisions

Click for more news covering the latest on ESG and sustainable finance

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