Twenty-one state attorneys general are putting pressure on two proxy advisory firms to stop pushing environmental, social, and governance (ESG) rules, saying the policy push goes against the firms’ contractual obligations.
The group of attorneys general sent a letter to Institutional Shareholder Services, Inc. (ISS) and Glass Lewis & Co. (Glass Lewis) over the proxy voting advice they give to many of their states.
They also allege that the advisory firms violate their contractual obligations to the states. “You are subject to both federal and state laws governing the advice and duties of proxy advisors. You are also subject to contractual obligations—including directly to some of our States’ investment vehicles,” the letter, led by Utah attorney general Sean Reyes, stated. ISS and Glass Lewis are a part of an international group of financial institutions (Climate Action 100+) committed to aligning their lending and investment portfolios with net-zero emissions by 2050. In return, the proxy advisory firms recommend votes on company directors and proposals based on whether a company is implementing “net zero emissions” goals and related climate commitments, which are some of the fundamental tenets of the ESG criteria.
The letter stated: It has come to our attention that you have made several commitments that may interfere with your ability to honor your legal obligations. In this letter, we provide evidence of these potential breaches, specifically as they relate to your climate and diversity, equity, and inclusion priorities. We seek written assurance that you will cease such violations and commit to following the law. ... [T]he publicly available statements and actions of ISS and Glass Lewis in the performance of their duties as proxy advisors raise serious questions about whether both have violated their statutory and contractual duties. It appears that both have acted contrary to the financial interests of their clients and have promoted and relied upon false or misleading statements—and in so doing, have engaged in fraudulent and misleading practices. In this case, the group of attorneys general are alleging that the advisory firms are breaking their contractual obligations by abandoning their fiduciary duties to their clients and adopting the radical environmental agenda that experts predict to be impossible. Reyes, in a statement to Breitbart News last week, said, “Because these firms have a duopoly in the proxy advisory market, they exercise enormous influence in advancing the ESG movement.” “A proxy advisor must prioritize the economic value of their client’s investments. Unfortunately, it appears these two companies are prioritizing political activism over the best interests of Utah and its citizens,” Reyes added. Additionally, Will Hild, the executive director of Consumers’ Research, told Breitbart News in a statement last week, “The two major proxy advisors have been selling out their state pension fund clients on behalf of the net zero scams, and it’s about time they were held to account. This action by 21 state Attorneys General is an important step in ending their abuse of state assets.” Last year, Republicans in the U.S. House of Representatives launched an anti-trust investigation into Climate Action +100.
The lawmakers allege the group is working like a “cartel” to “ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.” The House Republicans sent a letter to members of the Steering Committee for Climate Action 100+, a group that pushes corporations to “take necessary action on climate change” and has spearheaded the left’s ESG movement.
The letter was to demand documents showing the group “facilitating and coordinating companies’ efforts to achieve ESG-related goals” since December 2016, in addition to being a “formal request to preserve all existing and future records and materials relating to the topics addressed in this letter.” 2023-01-17 Utah & Texas Letter to Glass Lewis & ISS by Breitbart News on Scribd House Republican letter to ... by The Federalist Jacob Bliss is a reporter for Breitbart News. Write to him at firstname.lastname@example.org or follow him on Twitter @JacobMBliss.
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