Jan 17 (Reuters) -

Asset manager BlackRock ( BLK ) agreed to new disclosure

requirements about its use of sustainable-investment factors as

part of a legal settlement with Tennessee Attorney General

Jonathan Skrmetti, his office said on Friday.

The resolution is the latest step by New York-based

BlackRock ( BLK ) and by other firms

to move away from environmental, social or governance

measures. An anti-ESG backlash has gathered force among Skrmetti

and other Republican politicians including incoming U.S.

President-elect Donald Trump.

Skrmetti

sued BlackRock ( BLK )

late in 2023, alleging it did not adequately disclose its

use of ESG factors and that it overstated their financial

benefits. Although BlackRock ( BLK ) did not admit to wrongdoing or pay

fines as part of the deal, Skrmetti told Reuters in an interview

that the agreement was significant as a mark of the times.

"BlackRock ( BLK ) was at the heart of this, the biggest asset

manager in the world, and their willingness to undertake this

settlement speaks to the end of the ESG moment," he said. The

company's steps like

quitting an investor climate group

on Jan. 9 "certainly helped solidify" the agreement, he

said.

BlackRock ( BLK ), with some $11.6 trillion under management, said

it was pleased to resolve the dispute with Tennessee. "BlackRock ( BLK )

has consistently acted in the best interests of our clients, and

we welcome the opportunity to demonstrate that fact through even

greater transparency about our practices," the company said in a

statement sent by a representative.

Among other things, BlackRock ( BLK ) agreed to disclosure

requirements such as giving quarterly, not annual, details about

votes it cast, and to provide a rationale when its non-ESG funds

cast proxy votes against management recommendations on

environmental or social matters.

BlackRock ( BLK ) already provides many such details on its

website

. Skrmetti said the formalization of the disclosures creates

a "comprehensive compliance regime" and that the lack of

financial penalties helped speed the deal.

ESG investing enjoyed a run as a hot area of finance but

investors

pulled back in recent year

s after Russia's invasion of Ukraine surged energy prices

and hurt the relative performance of technology-heavy ESG funds

that often avoid fossil fuel stocks.

Meanwhile Republicans, often from energy-producing

states, have increased pressure on BlackRock ( BLK ) and rivals like

Vanguard and State Street over the issue. Fink said in 2023 that

he

had stopped using the term

ESG as it had become too politicized.