BlackRock has been issued a legal warning over ‘false and misleading statements’ in relation to climate change.

The investment giant, which manages around £8 trillion assets globally, has been accused of ‘fraudulent’ climate statements by Mississippi state officials.

An administrative ‘cease and desist’ order was released by Mississippi's Secretary of State on Wednesday 27 March, which accuses BlackRock of misleading investors in its funds about the investment manager’s efforts on climate change.

“Many of BlackRock’s acts, practices and courses of business operate or would operate as a fraud or deceit upon investors and potential investors in Mississippi,” Mississippi Secretary of State, Michael Watson, said in the order.

His complaint primarily concentrates on BlackRock investments, including exchange-traded funds (ETFs). Watson alleges that the firm’s statement that it doesn’t follow a “sustainable, impact or ESG strategy” for such products is “untrue or misleading”.

BlackRock has been hit by several threats from US states in relation to its ESG efforts, with Florida, Louisiana and Missouri previously stating they plan to pull investment mandates from the firm.

The state of Tennessee also filed a lawsuit against BlackRock, stating the firm had made ‘a series of unlawful ESG-related misrepresentations’.

Additionally, a report published by the Common Wealth thinktank last year found BlackRock was among other asset managements to use funds with an ESG label to invest in coal, oil and gas.

The thinktank said that despite the claim that some ESG funds offer an environmentally and socially responsible option for investors, “the research shows these funds are significantly exposed to fossil fuel firms”.

In a statement, BlackRock said it operates in “one of the most highly regulated industries in the country and are committed to following the law in every respect.”

"Our only agenda is maximizing risk-adjusted returns for the funds our clients choose to invest in.”

The investment firm has 30 days to respond to the complaints made by the Mississippi state.

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