The State Board of Administration of Florida (SBA) on Thursday joined a class action lawsuit against Target, its Chief Executive Officer and Chairman Brian Cornell, and 12 members of its Board of Directors, alleging violations of federal securities laws related to the company’s environmental, social, and governance (ESG) and diversity, equity, and inclusion (DEI) initiatives.

The complaint, filed in the U.S. District Court for the Middle District of Florida, contends that Target and its executives misled investors regarding financial risks associated with the company’s ESG and DEI policies, particularly in connection with its 2023 LGBTQ+ Pride campaign. The SBA, which manages public pension funds, claims that these misrepresentations resulted in substantial financial losses for shareholders, including the state’s retirement system.

According to the lawsuit, Target failed to disclose the risk of consumer backlash stemming from its ESG and DEI initiatives in its 2021 and 2022 annual reports. The SBA argues that the company’s 2023 LGBTQ+ Pride campaign, which included children’s apparel and merchandise from a designer with controversial social and political messaging, triggered widespread boycotts, leading to a $25 billion decline in Target’s market capitalization over several months.

Target Corporation … and its Board of Directors betrayed both Target’s core customer base of working families and its investors by making false and misleading statements about Target’s Environmental, Social and Governance and Diversity, Equity, and Inclusion mandates that led to its disastrous 2023 children-and-family themed LGBT-Pride campaign,” the suit reads. “The Campaign provoked immense consumer backlash and boycotts that caused Target’s sales to fall for the first time in six years and wiped out over $25 billion in Target’s market capitalization—leading Target’s stock to experience its longest losing streak in 23 years.”

The complaint further states that Target’s 2022 and 2023 proxy statements falsely assured investors that the Board was overseeing social and political risks associated with ESG and DEI mandates. The SBA contends that rather than evaluating the risks of consumer backlash, the Board’s focus was on ensuring compliance with progressive stakeholder demands. Additionally, the lawsuit alleges that executive compensation plans were structured to reward ESG and DEI progress rather than prioritizing shareholder value.

“Target’s 2022 and 2023 Proxy Statements falsely and misleadingly stated that Target’s Board and its committees oversaw social and political issues and risks arising from Target’s pursuit of ESG/DEI mandates [and] adopted Target’s ESG/DEI mandates in order to advance shareholder value,” the lawsuit alleges.

The suit seeks damages and corporate governance reforms, arguing that Target’s leadership engaged in deceptive practices that misled investors about the financial impact of the company’s policies