The Republican state attorney general has questioned proxy advisory firms Institutional Shareholder Service and Glass Lewis about ESG’s recommendations the agency has warned of possible legal challenges.
In a letter sent to ISS and Glass Lewis on Tuesday, the 21-state attorney general said, based on the company’s analysis and voting recommendations, that proxy counsel “could interfere with your ability to meet your legal obligations.” We have made some serious commitments,” he said. On issues of climate and diversity.
In providing proxy voting services to state investment vehicles, the Attorney General said ISS and Glass Lewis were contractually free of conflicts of interest and were required to “consider only one objective: the economic value of the investment.” said there is.
The letter addresses the nature of these agreements in relation to the proxy voting company’s pledge to make voting recommendations to company directors based on, among other issues, the company’s net-zero goals and board diversity. It cites evidence of “potential violations.” He warned that these actions “could threaten the economic value of state and citizen investments and pensions.”
Regarding the issue of board diversity, he warned, “Your actions appear to be those of an activist who forces companies to comply with rules that the government would not enact.”
The letter asks for written assurances by January 31 that they “commit to cease such violations and to abide by the law.”
The Attorney General also asked ISS and Glass Lewis to identify the asset managers of the Net-Zero Asset Manager Initiative who are involved on emissions reduction issues and to explain the extent of their coordination with Climate Action 100+.
In a statement provided by an ISS spokesperson, ISS said the letter “reveals a fundamental misconception about market forces at work. Independent providers of research and voting recommendations. As such, the sole purpose of ISS is to provide our clients with effective tools and policy options.” We take our legal obligations seriously, answer the questions in the letter, and look forward to continuing to offer diversity to our investor clients. of providing independent and objective research that they request. ”
Calls to Glass Lewis were not immediately returned.
